The Appellate Record : Texas Appellate Lawyer & Attorney Kendall Gray for Fifth Circuit & Supreme Court Appeals

In my last post, I summarized the Fifth Circuit's new MGE UPS Systems opinion.  The substance is sound and important to civil lawyers, but I've got a bone to pick with the author.

This legal writing rant could be brought to you by Radio Shack and its series of Tour de France Alphonse commercials with Lance Armstrong.  The one I have in mind is, "LOL," where Lance sets out the rules of engagement:

First things first: No man over the age of 30 will EVER use emoticons. 

And poor Alphonse replies, "LOL, Lance," to which Lance gives his steely glare: 

Whoa.  LOL??!!!  Don't make me get off this bike.

Not that I am the Lance Armstrong of anything, but I propose a new rule:

No one with a law degree will EVER make up his or her own acronyms.

I've heard judges complain about briefing in which every corporation and affiliate bears its own inscrutable acronymic reference.  And the complaints are well taken.  You shouldn't need a score card or an answer key to tell who did what to whom. If one has to either memorize new abbreviations or flip back and forth to the definitions, the odds of engaging that reader are markedly diminished.

But the same can be said for opinions that are an alphabet soup of abbreviations.  Why not give parties and statutes names that make intuitive sense? (And secondarily, why can't companies have names instead of alphanumeric hieroglyphic identifiers??)  In the first pages of MGE, for example, we are treated to:

• MGE
• GE
• GE/PMI
• DMCA

And this opinion is not even a big offender.  But all one really needs is MGE and Power Management.  Because of all the extras, I can tell you that I was not LOL-ing or ROTFLMAO-ing or even LQTM-ing while I was trying to learn the technology involved in the dispute.  Several times, I was all, like, "BRB--I have to turn back to the first page to figure out what's going on here."

Simply stated, neither briefs nor opinions ought to read like Bankruptcy Plans or Offering Memoranda.  (Bankruptcy Plans and Offering Memoranda likely ought not be the way they are either, but that's a post for another day.)

Now, I'm not condemning acronyms that everybody knows already, e.g., IRS, NASA, USA, AT&T or ERISA.  Those kinds of acronyms aid comprehension because they already contain meaning.  Because they aid in precision and understanding they are good. 

But excessive use of made up acronyms rather than just calling the parties "Power Maintenance" or "Plaintiff" violates Kendall's Prime Directive Of Legal Writing:

No matter what Bryan Garner and the Bluebook say, anything that interferes with understanding is bad.

So, please.  The life you save may be your own:

No one with a law degree will EVER make up their own acronyms.

Don't make me get off this bike.

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Yesterday, the Fifth Circuit released an opinion of some importance for commercial and intellectual property litigation.  

In MGE UPS Systems Inc. v. GE Consumer Industrial Inc. (pdf), the Court affirmed an injunction against a competitor's unauthorized use of security "dongles" to boot up software necessary to service and calibrate uninterruptible power supplies.  All the underlying damage claims, however, failed.  Judge Garza wrote the Court's opinion.   

The Court held that

1. The Digital Millennium Copyright Act's provisions on circumventing technological measures protecting copyrighted work "prohibits only forms of access that would violate or impinge on the protections that the Copyright Act otherwise affords copyright owners."  You can get a copy of the Act here (pdf) and a summary of it's contents here (pdf).
2. The plaintiffs' claims for damages for copyright and misappropriation of trade secrets claims could not be sustained based upon evidence of the wrongdoer's gross revenues.  

The damages question has the widest application to commercial and intellectual property litigation.   The Plaintiff's "Plan A" failed when it's damages expert was struck and it's lay witness was found to be insufficient to establish a reasonable royalty.  The Fifth Circuit was not asked to review these trial court rulings.  While the statutory and common law claims would have allowed for recovery of the wrongdoer's profits from the violation or misappropriation, all that was left was information concerning the defendant's gross revenues from a variety of businesses. 

This was not enough. Not only is gross revenue not the same as profit, the Court made an "Erie Guess" that Texas would not adopt a comment from the Restatement (Third) of Unfair Competition placing the burden on the defendant to show what was not attributable to the wrong once a plaintiff had placed a gross number in issue. 

Said the Court:

In the only reported Texas case involving the recovery of defendant’s profits for a misappropriation of trade secrets claim, the Dallas Court of Appeals held that although defendant’s profits are a “proper element[ ] of damages in a case involving the wrongful use of a trade secret,” a plaintiff cannot recover damages without offering evidence “to show the actual profit made by [defendant].” Elcor Chem. Corp. v. Agri-Sul, Inc., 494 S.W.2d 204, 214 (Tex. Civ. App.--Dallas 1973, writ ref’d n.r.e.) . . .

* * * 

MGE points to PMI’s total revenue . . . and argues that, under the Restatement, this exhibit satisfies its burden of proof with regard to PMI’s “sales” of providing service to UPS machines. MGE contends that GE/PMI subsequently had the burden of demonstrating which portions of PMI’s revenue were not attributable to the state law claims, which it failed to do. Texas courts have not adopted the RESTATEMENT (THIRD) OF UNFAIR COMPETITION in its entirety and whether § 45’s comment f is controlling in Texas courts is still an open question. . . . The burden-shifting procedures noted in comment f are not included in the first RESTATEMENT OF TORTS, whose definition of and factors used to identify trade secrets are still used by Texas courts. . . . Neither the Texas Supreme Court nor any of the Texas appellate courts have specifically applied comment f to determine a defendant’s profits in a trade secret action. Given that comment f’s standard sets a plaintiff’s burden of proof for trade secret damageslower than the standard applied in Elcor, we conclude that the Texas Supreme Court would not adopt the burden-shifting procedures of comment f.

Watch this space for some further commentary on MGE. 

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Yesterday, the Fifth Circuit released Willow Bend v. Downtown ABQ Partners, a personal jurisdiction case that will be of interest to commercial practitioners.  The contractual and breach of fiduciary duty claims arose out of a Louisiana real property transaction.  The Court affirmed a dismissal for lack of personal jurisdiction as to a non-signatory individual (Garcia) and the partnership for which that person was the managing partner (Downtown ABQ).   Judge Higginbotham wrote the Court's opinion. 

Determining minimum contacts can sometimes be like trying to nail jello to a tree.  But Judge Higginbotham (in characteristic fashion) gives the analysis some structure. 

Judge Higginbotham's take on minimum contacts requires a nexus between:

• the forum;
• a particular party; and
• a substantive legal duty actually pertaining to that specific party. 

The nexus was present with regard to the company that actually entered into the contract.  It did not exist for Garcia, nor for the partnership managed by Garcia.  The reason: the duties alleged were tethered to the contract to which they were not a party and did not apply to them.

This paragraph from the opinion sums it up:

[The] written agreement is no throwaway: in fact, it is the critical forum contact in this case, and the linchpin of the district court’s exercise of jurisdiction over Blue Dot. Willow Bend’s winning breach of contract and breach of fiduciary duty claims against Blue Dot arose out of and resulted from Blue Dot’s primary contact with the state of Louisiana—its contract with Willow Bend. Without a contract tying the non-signatories Garcia and Downtown ABQ to Willow Bend’s claims against them, however, those claims share an inadequate nexus to the forum: . . .  Willow Bend sued for breach of contract and breach of fiduciary duty, after all, and a defendant cannot be said to have breached a contract it never made or to have skirted a duty it never assumed. . . . Willow Bend contracted with Blue Dot—and Blue Dot alone—and it is with Blue Dot that its claims for breach of contract and breach of fiduciary duty must lie.

Thus, jurisdiction and the merits are enmeshed because jurisdiction is "claim specific." Had the breach of a different legal duty that applied to the non-signatories been alleged (e.g., fraud) a different result might have obtained. 

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As reported by Erin Miller at SCOTUSBlog, the committee vote on Elena Kagan's Supreme Court nomination has been delayed until next week, ostensibly to provide additional time for senators to parse her written responses.  I suppose that's little enough to ask in exchange for a most prestigious job for life, but color me cynical.  No matter what the answers say, we will be treated to senators in front of television cameras opining that the same person is either an insufferable "judicial activist" or unsurpassed "legal scholar," and one already knows which senators will hold which view.  One suspects, therefore, that ideology has become disconnected from reality, no matter which ideology is held.

The cynic amongst us, therefore, would say that senate confirmation hearings are nothing more than an empty Kabuki dance--and that with bad dancers.  All the players assume their accustomed rolls and say their accustomed lines while performing their accustomed movements.

The high minded might counter that the Senate has a constitutional obligation to carry out as part in the separation of powers--at its height to save The Republic from life tenured legislators run amok.

Presumably, that is why the language of the high minded can become so heated, to wit, this statement about The President's nominee:

It is one of the deepest wounds that I have ever had as an American and a lover of the Constitution and a believer in progressive conservatism, that such a person could be put in the Court, as I believe she is likely to be. She is a muckraker, an emotionalist for her own purposes, a socialist, prompted by jealousy, a hypocrite, a person who has certain high ideals in her imagination, but who is utterly unscrupulous, in method in reaching them, a person of infinite cunning. . . . of great tenacity of purpose, and, in my judgment of much power for evil.  

I mean, if half of that were true, who would nominate (much less confirm) such a scoundrel?  But can even half of it be true?  And have we now made such a mess of the confirmation process that such incivility occurs without condemnation? 

But don't answer yet.

That statement is not about President Obama's nominee.  And the nominee was not even a woman.  I cheated.  I changed the gender in the quote. 

The quote is about President Wilson's nominee.  And the nominee's name was Louis Brandeis. 

Yes, that Louis Brandeis. 

The person who hurled such calumnies at the future Justice Brandeis was William Howard Taft, who probably wanted the appointment for himself and who later served as Chief Justice on the same court with this Brandeis "muckraker." 

And yet The Republic managed to survive the muckraking creator of the Erie Doctrine.  (The Republic has, to date, always done so).

The point: we've been doing confirmation wrong for a long time.  The amount of wrongness just waxes and wanes with the political temperatures of the times.

But it is still wrong, even if well-established wrong.  And it is a wrong lawyers have special responsibility to address.  Ours is the job of promoting respect for the judiciary, even a judiciary with which we sometimes disagree. 

How would this process look if self-serving Senators were held accountable by members of the bar in their states?  And I wonder, do we lawyers have the judgment to recognize opportunistic Kabuki dancing, even when committed by those of our own political stripe?

We now return you to our regularly scheduled appellate blog.

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Regular readers will remember the recent post where I kvetched about the tendency of SCOTUS judges to write "page turners"--and not in a good way.  Those are opinions in which you can't tell what is going on for lack of a good introductory paragraph to help you organize the information.  Instead you must wade through recitations of legal history, factual history, procedural history, and sometimes history history, all while wondering:

Is this going to be on the test?

If that post was a wag of my blogging finger, consider this a tip of my bloggorial chapeau.  For in addition to being the Chuck Norris of the legal world, the Chief Justice of the Supreme Court of Texas shows his federal brethren how it is supposed to be done.

Consider the introductory paragraph from Grant Thornton v. Prospect High Income Fund.  It gives you enough information to fully understand what the issue is, why it is important, who wins and why:

Certified accountants audit companies for many purposes, not least of which is to provide corporate directors with an objective assessment of their companies’ performance. Audits are also prepared to give information to a specific investor who the auditor knows will rely on its contents. We must decide whether the law imposes an obligation on the auditor to provide an accurate accounting not to the corporation or known investor, but to anyone who reads and relies on it. We conclude that it does not. Likewise, we hold that the particular investors involved in this case could not have justifiably relied on the audit reports as to purchases made after they knew the corporation was at risk of financial ruin, and they may not substitute their escrow agent’s reliance for their own without also being bound by its knowledge. Finally, we reject the investors’ “holder” claims—claims not that they bought or sold securities based on the auditor’s reports, but that they held them when they otherwise would not have—in the absence of a direct communication with the auditors. For these reasons, we reverse in part the court of appeals’ judgment and render judgment that the investors take nothing.

All of this comes in the first paragraph. And because it does, any other page in the opinion makes sense.  The opinion hangs together whether it is read straight through (which, let's face it, hardly ever happens) or in single issue snatches while writing your own brief.  And because you know how the story ends, you never have to guess about which facts or procedural events are important. 

It's not much of a way to write a mystery or a thriller, but it's the perfect way to write your brief if you want it to be read and understood. 

Or you could go for mystery.

So here's to you, Mr. Good Summary Introductory Paragraph Guy.  We doff our collective hat.

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A mulligan, in a game, happens when a player gets a second chance to perform a certain move or action. The practice is also sometimes referred to as a "do-over."

--Wikipedia

Alas, dear reader.  Here is where you get to find out what an ERISA geek I am.  I've worked in this area since about 1998, that fateful weekend when I made a note book of all the Supreme Court ERISA cases and studied them.  

'Cuz that's how I roll.

So, imagine how my heart went pitter pat when the Supreme Court released Conkright v. Frommert a few weeks ago and delved into the "abuse of discretion" standard of review for ERISA benefit determinations.

(Just a minute.  I need to take a moment to gather myself.  I'm all verklempt.  Talk amongst yourselves.)

Conkright is a lesson in how loose lips from prior opinions sink ships for clients and counsel looking for legal standard they can follow.  More precisely, it is a lesson in how mushy judicial language and multi-prong balancing tests create problems -- lawsuits born of ambiguity -- that some later court has to clean up.

After the jump, I'll explain why Conkright is an ERISA Mulligan that was needed to clean up its prior, imprecise opinion.  And as a bonus, I'll explain that it's at least the second such Mulligan the Supreme Court has needed in this area. 

Continue Reading...

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Monday's Supreme Court opinions, ably reported by Erin Miller at SCOTUSBLOG, were . . . how does one say it . . . underwhelming. 

There I sat with my vuvuzela and SCOTUS face paint waiting on Bilski and waiting to see if the Fourteenth Amendment protects me from having the City of Chicago pry my guns from my cold dead fingers, and what do I get?

• The Carmack Amendment,
• The FAA,
• Seed deregulation, and
• It's wrong to support terrorism, even in the Ninth Circuit. 

Who knew?  Like you, I was gobsmacked.

But separate from the legal issues involved, I noticed something about the legal writing that pushed my buttons--indeed a HUGE pet peeve with me.  So consider yourself warned, SCOTUS.  Consider this post a wag of my prodigious, blogger finger.

After the jump, your humble blogger will demonstrate why Supreme Court Opinions are no place for prospective suspense writers.  Just tell us, "whodunit."

Continue Reading...

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Every once in a while you can learn something really useful from good ol' Judge Per Curiam.  The Supreme Court's recent decision in Wal Mart Stores v. Merrell is just such a case. 

The decedents died from smoke inhalation when their recliner burned.  So obviously, it was Wal Mart's fault  because the damaged floor lamp Wal Mart sold them was the culprit.  Right?  After all, according to the expert "the lamp’s halogen bulb exploded, sending burning glass shards onto the recliner, which smoldered for several hours."

Or maybe the decedents set the recliner alight themselves while smoking the drugs that were found in their system--either with candles or perhaps the "blunts" and  "smoking paraphernalia throughout the house, including ash trays, a bong, and marijuana cigarette butts." 

(Incidentally, did anyone other than me find it amusing that the Supreme Court of Texas found it necessary to drop a footnote to explain exactly what a "blunt" is?  I never saw anything stronger than an aspirin at my High School, but even I found the definition unnecessary and humorous.)

After the jump, a little homily on what this case really teaches us.

Continue Reading...

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Did you notice when the Fifth Circuit ceased to be?

Let me explain.

No, let me sum up.

The Fifth Circuit ceased to exist for one particular case.  The result was a non-en-banc en banc reversal of the panel opinion, and the non-affirmance affirmance of the the district court opinion. 

I am referring to Comer v. Murphy Oil.  The District Court dismissed the case holding that hurricane victims could not sue the military industrial complex for worsening their hurricane damage by contributing to global warming.

A panel of the Fifth Circuit held, "yes you can."

The en banc court said, "no you can't"

Except it didn't.  Well, kinda.  After the jump, an explanation and a recommendation. 

Continue Reading...

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