5th Circuit Contract Law News - U.S. Fifth Circuit
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BP has taken its last gasp of air as it seeks it's one and only option in the ongoing saga of the oil-spill settlement agreement the company hastily signed. After unsuccessful attempts with the Fifth Circuit Court of Appeals, the oil giant is now trying its hand with the U.S. Supreme Court.

Whether the Supreme Court will grant cert. remains to be seen, but in the meantime, let's take a look at the legal backdrop of the case.

A lady signs up for a checking account with a bank. She closes the account a year later. A few years after that, she's involved in a car accident, her attorney negotiates a settlement, and then embezzles the funds. Bad times.

She sues the attorney's bank, which she alleges ignored blatant signs that he was a scheming crook. The bank cries "arbitration!" based on her long-since closed checking account agreement from many years prior. Common sense says "puh-leaze," right? Unrelated disputes, unrelated accounts, and the arbitration agreement was signed in connection to a long-since closed account. Ridiculous.

Arbitration agreements often seem one-sided, and in some employment cases, they may seem downright predatory.

But as the Fifth Circuit affirmed in their most recent look at arbitration agreements, even an agreement that allows the employer to unilaterally terminate is not illusory -- it's legal.

A Lowe's employee was properly denied ERISA benefits on her death because of an insurance administrator's interpretation of her plan's coverage of work trips.

In a very sad case before the Fifth Circuit, Elizabeth Porter died in 2008 when a car hit hers head-on, killing herself and her unborn child. Porter had insurance benefits through her employer, Lowe's, but the company refused to pay those benefits to her husband because Porter had died while going to and from work.

The Fifth Circuit sided with the insurance administrator in Porter v. Lowe's Companies, finding that despite the gruesome facts, the decision was reasonable enough.

In a case filed Tuesday, the Fifth Circuit reviewed a tort claim by banks which had suffered economic damages at the hands of a ring of hackers who had stolen millions of credit card numbers.

Not the short-haired, mid-1990s Angelina Jolie type hackers, but the sophisticated real-world kind who caused several banks (called "Issuer Banks") to replace compromised credit cards and reimburse their customers for any fraudulent charges.

Pilgrim's Pride won't have to shell out $25 million to Texas, Arkansas, and Louisiana chicken growers after the Fifth Circuit overturned the lower court's ruling that declared the corporation closed down some of its operations in an attempt to manipulate prices.

The Texas-founded poultry corporation, Pilgrim's Pride Corporation (PPC), closed some of its chicken processing plants in 2009 due to an unexpected overproduction of chicken which was driving prices down, but this shift caused chicken growers to lose tens of millions of dollars, reports The Dallas Morning News.

What convinced the Court that PPC wasn't illegally playing the market?

Texas-based oil corporation Anadarko announced on Tuesday that it would double the amount of quarterly dividends for common stock, a move that coincides with the Fifth Circuit Court awarding Anadarko $9 million plus interest for oil sales in 2000-2002.

Although it may be written off as a coincidence, Anadarko's Exec. Vice Pres. and CFO, Bob Gwin attributes the dividend increase to the company's capability to "deliver capital-efficient growth within cash flow" (read: money money money), reports The Wall Street Journal.

While Anadarko's investors are soon to be lining their pockets, what caused this windfall?

The Fifth Circuit gave the O.K. to a Dallas ordinance which allows CNG-fueled cabs to move to the head of the line when picking up passenger’s from the city’s Love Field Airport.

The Court’s decision on Thursday in Association of Taxicab Operators USA v. City of Dallas comes as a big win for cities incentivizing compressed natural gas (CNG) vehicles, which operate with lower emissions than gasoline powered vehicles.

The Fifth Circuit opined that this law is not preempted by the federal law, particularly the Clean Air Act.

5th Circuit to Decide Arbitration Agreement Controversy

An important decision will soon be made by the Court of Appeals for the Firth Circuit. This decision will affect employment arbitration agreements. It can potentially prevent employers from pursuing class action waivers from their employees within the arbitration context.

Contract or Tort: Which Applies to Faulty Work on a Liftboat?

Associated Gas & Oil Company, Limited bought two self-elevating liftboats -- Nicole and Kaitlyn -- from Offshore Marine Inc. (OMI) pursuant to an asset purchase agreement. Under the agreement, OMI agreed to install additional living quarters and accessories on the two vessels. OMI used its sister corporation, Tram Shipyards, Inc. to purchase the materials and complete the additional work.

In the course of installing the additional living quarters on the Nicole, Tram cut, extended, and re-welded the crane boom cradle stanchion of the hydraulic pedestal crane. Transporting the liftboats from Louisiana to Nigeria for an Associated contract proved problematic. The flotilla encountered rough seas, and the stanchion snapped at the site of the weld, causing the crane boom on the Nicole to swing wildly and crash into the additional living quarters.

There was damage. The boats had to divert from their course before ultimately returning to Louisiana for repairs, and they didn't make it to Nigeria for the contract. Associated suffered "a crippling loss of profits." So what's the proper path to remedy? Contract or tort?