David C. Godbey

In Napier v. Humana Marketpoint, Inc., the plaintiff sued her former employer in Texas state court for age discrimination under state law, seeking back pay, front pay, compensatory damages, punitive damages, and attorney fees without specifying a dollar amount, as required by Texas procedural rules. After the defendant answered and the plaintiff later amended her petition to allege a maximum of $1.367 million in damages, the defendant removed the case to federal court on diversity grounds 76 days after receiving the original petition. The court granted the plaintiff's motion to remand, holding that removal was untimely under 28 U.S.C. § 1446(b). It reasoned that the original petition affirmatively revealed on its face that the amount in controversy exceeded the $75,000 jurisdictional threshold—through the combination of the types of damages requested—triggering the 30-day removal clock immediately upon service, rather than only upon the later amended petition.

labor & employmentprocedure

In this case, investors who lost money in the Stanford International Bank Ponzi scheme sued the United States under the Federal Tort Claims Act, alleging that SEC officials, including former enforcement director Spencer Barasch, negligently failed to investigate or stop the fraud despite early warnings, engaged in conflicts of interest, and inadequately supervised the matter, causing roughly $18.7 million in damages. The court granted the government's motion to dismiss for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). It held that the claims fell within the FTCA's discretionary function exception, which preserves sovereign immunity for actions involving the SEC's discretionary decisions on enforcement priorities, investigations, and regulatory responses. The court reasoned that such choices inherently involve policy considerations protected by the exception, regardless of allegations about ethics violations or inadequate performance. The dismissal was without prejudice.

business & regulatorytorts & liabilityprocedurefederal power

This case arose from the SEC's securities fraud action against R. Allen Stanford and related entities, leading a court-appointed receiver to sue various Democratic and Republican political committees to recover about $1.6 million in contributions made with Ponzi scheme proceeds over eight years. The receiver claimed these were fraudulent transfers under the Texas Uniform Fraudulent Transfer Act (TUFTA) because the committees provided no reasonably equivalent value in exchange. The political committees moved to dismiss, arguing the suit was untimely under TUFTA's statute of repose and preempted by federal campaign finance laws (FECA and BCRA), while the Republican committees also sought summary judgment on those defenses. The court denied the motions to dismiss and the Republican committees' summary judgment motion, granted the receiver's summary judgment motion, and held that the contributions qualified as fraudulent transfers from an insolvent Ponzi scheme, that equitable tolling applied to timeliness, and that federal election laws did not preempt the state-law claims.

electionscriminal lawbusiness & regulatoryprocedure

This case involves a court-appointed receiver in an SEC securities fraud action against R. Allen Stanford and related entities, seeking documents from nonparty Swiss bank SG Suisse regarding Stanford accounts. The receiver requested to proceed with discovery under the Federal Rules of Civil Procedure, but SG Suisse objected, citing Swiss financial privacy laws that could impose criminal penalties for disclosure and arguing for use of the Hague Convention on the Taking of Evidence Abroad. The court denied the request to use the Federal Rules and directed the receiver to first pursue discovery through the Convention's procedures, finding them reasonable under the circumstances due to principles of international comity, the optional nature of the Convention for obtaining evidence abroad, and the need to respect foreign sovereign interests in privacy laws. The court noted that if the Convention method proves unfruitful, the receiver could renew the request for documents considered part of the receivership estate.

procedurebusiness & regulatory

This case involves a trademark dispute between Cottonwood Financial Ltd., a U.S. operator of 'CASH STORE' payday lending centers in multiple states including Texas, and The Cash Store Financial Services, Inc. (CSFS), a Canadian company using the similar name 'The Cash Store' for its lending services and listed on the NYSE. Cottonwood sued for trademark infringement and unfair competition under the Lanham Act, plus trademark dilution under Texas law, alleging that CSFS's U.S. investment activities and name use caused confusion and diluted its marks. The court held that it has subject matter jurisdiction over the claims but that Cottonwood failed to state claims under the Lanham Act, while granting a preliminary injunction based on a substantial likelihood of success on the Texas dilution claim and enjoining CSFS from certain uses of the marks in connection with its U.S. activities. The reasoning centered on the strength of Cottonwood's marks, the similarity of the names and services, CSFS's U.S. solicitation efforts, and the risk of dilution under Texas law, while finding insufficient grounds for federal Lanham Act relief.

business & regulatoryprocedure

This case involves a plaintiff who sued Mortgage Electronic Registration Systems, Inc. (MERS), Deutsche Bank, and Washington Mutual Bank (WaMu) after removal from state to federal court. The court ordered the plaintiff to show cause for failing to serve the defendants within 120 days under Fed. R. Civ. P. 4(m). The plaintiff claimed service on MERS and WaMu via the Texas Secretary of State under the long-arm statute, but records showed direct mailing to MERS's agent instead of proper service through the Secretary, WaMu was in FDIC receivership making the FDIC the proper party (who was never served), and Deutsche Bank received no service at all. The magistrate judge found no good cause for the failures and recommended dismissal without prejudice, which the district judge adopted as the court's order.

procedure

This case is a shareholder derivative action brought by Stanley Sved against Home Solutions directors, alleging breach of fiduciary duty, abuse of control, gross mismanagement, waste of assets, unjust enrichment, and insider selling based on false and misleading statements about the company's practices and finances. The parties reached a settlement providing for corporate governance reforms, such as separating the chairman and CEO roles, appointing independent officers, and enhanced disclosure procedures, along with attorney fees, but Sved later withdrew consent citing the company's financial difficulties and a new SEC enforcement action. The court granted final approval over the objection after finding the agreement fair, reasonable, and adequate, and it denied Sved's motion for reconsideration under Rule 60(b)(2) because the new evidence was not material enough to produce a different result. The court incorporated the settlement terms into its order and noted that Sved could still seek enforcement if needed.

business & regulatoryprocedure

This case is a tax refund suit in which Trinity Industries, Inc. sought credits under IRC § 41 for qualified research expenditures incurred by its marine division during tax years 1994 and 1995 in connection with six shipbuilding projects. The court applied the statutory requirements that qualified research must involve business expenses under § 174, discovery of technological information, development of a new or improved business component, and a process of experimentation, while excluding post-production activities or customer-specific adaptations. After reviewing evidence on each project, such as the Mark V patrol boat and Dirty Oil Barge that met the criteria in part, versus others like the XFPB and T-AGS 60 that did not, the court determined which expenditures qualified and directed the parties to submit supplemental briefs on the precise refund amount.

taxesbusiness & regulatory

This case involves a federal habeas corpus petition filed by David Coker challenging his state conviction, in which the respondent raised an affirmative defense that the claims were barred by the AEDPA statute of limitations. The district court addressed objections to the magistrate judge's findings, which had denied relief on the merits without first resolving the limitations issue. The court overruled the objection, holding that the AEDPA limitations period is not jurisdictional and that courts are not required to address it before denying habeas relief on the merits. The reasoning emphasized that Supreme Court precedent like Day v. McDonough permits skipping the threshold issue when no relief will be granted, avoiding unnecessary evidentiary hearings and logistical burdens on incarcerated petitioners.

criminal lawprocedure

In Smith v. Xerox Corp., a long-term employee sued her employer under Title VII, alleging age and gender discrimination as well as retaliation after she filed an EEOC complaint and was terminated shortly thereafter. Xerox maintained the termination resulted from poor performance, and a jury found for the employer on the discrimination claims but for the employee on retaliation, awarding compensatory and punitive damages. Xerox renewed its motion for judgment as a matter of law or a new trial, contending that the court had erred by instructing the jury on a motivating-factor causation standard rather than but-for causation and that the evidence was insufficient. The district court denied the motion, holding that Fifth Circuit precedent applies the mixed-motive framework to Title VII retaliation claims and that the record contained adequate evidence of causation and malice or reckless indifference to support the verdict.

labor & employmentcivil rights

Jason Cline filed suit seeking judicial review of the Social Security Commissioner's final decision denying his application for supplemental security income benefits under Title XVI, alleging disability beginning in 2004 due to mental health conditions such as depression, bipolar disorder, and psychotic symptoms. The district court accepted the magistrate judge's recommendation, granted Cline's revised motion for summary judgment, denied the Commissioner's cross-motion, reversed the ALJ's determination that Cline was not disabled, and remanded the matter for further administrative proceedings. The core reasoning was that the ALJ's evaluation of the medical evidence, including psychiatric reports, GAF scores, and assessments of functional limitations, was flawed and did not properly support the finding that Cline could perform his past relevant work or other jobs.

federal powerhealthcare

In Bragg v. Commissioner of Social Security Administration, Tamara Jean Bragg sought judicial review of the denial of her application for supplemental security income benefits under Title XVI, alleging that chronic pain in her back, hip, and leg rendered her unable to work. The district court accepted the magistrate judge's findings and granted Bragg's cross-motion for summary judgment, denied the Commissioner's motion, reversed the ALJ's decision finding her not disabled, and remanded the case for further proceedings. The core reasoning was that the ALJ failed to properly consider all medical evidence of her impairments and limitations, evaluate their combined effects, and provide adequate explanation for partially crediting certain statements about her daily activities and credibility.

healthcareprocedure

This case involves investors who loaned Sundance Resources over $14 million for oil and gas drilling rigs in exchange for working interests and repayment guarantees, alleging that company insiders including the Patmans systematically transferred assets like $4 million in cash to themselves while the company was insolvent, leaving it unable to repay the loans. Plaintiffs asserted claims for fraudulent transfer under TUFTA, common-law and statutory fraud, negligent misrepresentation, breach of contract, unjust enrichment, derivative liability, and Texas Securities Act violations, and sought appointment of a receiver. The court granted in part and denied in part the defendants' motions to dismiss, dismissing without prejudice the fraud and negligent misrepresentation claims for failing to meet Rule 9(b)'s particularity requirements due to vague group allegations, but allowing the fraudulent transfer claim and other claims to proceed based on specific factual allegations of transfers made without reasonably equivalent value during insolvency. The court denied the motion for a receiver without prejudice and set it for an evidentiary hearing, while also rejecting arguments to dismiss based on exemptions or indispensable parties not supported by the pleadings.

business & regulatoryproceduretorts & liability

This case consolidated derivative class actions brought on behalf of Michaels Stores, Inc., alleging that the company and its former officers and directors violated sections 14(a) and 20(a) of the Securities Exchange Act and SEC Rule 14a-9 by issuing proxy statements from 2004 to 2006 that failed to disclose prior backdating of stock options between 1993 and 2000, understated ownership by certain directors, and incorporated inaccurate financial reports. The court granted the defendants' motion to dismiss all claims. It reasoned that plaintiffs could not establish the required elements of a proxy fraud claim against each defendant, including negligence by those who had left the company years earlier, material misstatements where the proxies did not specifically incorporate the Form 10-K reports, and timely claims given the statute of limitations on the underlying backdating conduct.

business & regulatory

This case involved a dispute over coverage under a Nursing Home Only Insurance Policy purchased by Newellyn P. King from Life Investors Insurance Company of America. After King's death, her son and estate representative Douglas W. Kirkley sued the insurer for denying benefits for her stay at Autumn Leaves, an assisted living facility, arguing that it substantially complied with the policy's definition of a Nursing Home despite not being fully licensed as one. The court granted Life Investors' motion for summary judgment, finding no genuine issue of material fact regarding whether the insurer abused its discretion in denying the claim. The core reasoning was that Autumn Leaves was licensed only as an assisted living facility under Texas law, which does not authorize nursing home-level services, making it clearly non-compliant with the policy's licensing requirement and precluding substantial compliance.

business & regulatoryhealthcare

The case involved First Fitness International, Inc., a Texas-based company, suing former authorized distributors Frederick Thomas and Christina Sapp for unauthorized use of its trademarks on websites to resell its products after terminating their distribution agreements. The defendants moved to dismiss for lack of personal jurisdiction, arguing insufficient contacts with Texas. The court denied the motion, holding that specific personal jurisdiction existed because the defendants, with knowledge of the plaintiff's Texas location and trademark rights, intentionally directed their allegedly tortious conduct at Texas by using the trademarks and previously representing operations from a Texas address, thereby causing foreseeable harm there.

procedurebusiness & regulatory

In Ahmadi v. Chertoff, the plaintiff filed an application for adjustment of status with U.S. Citizenship and Immigration Services in 2003, but the agency delayed adjudication for nearly four years solely because an FBI name check remained pending. Ahmadi sued under the Administrative Procedure Act and Mandamus Act to compel the government to decide his application, and the government moved to dismiss for lack of subject-matter jurisdiction. The court denied the motion, holding that federal courts have jurisdiction because agencies have a nondiscretionary duty to act on adjustment applications within a reasonable time under the APA, even though the ultimate grant or denial is discretionary. The court further ruled that 8 U.S.C. § 1252 does not strip jurisdiction over claims challenging the failure to act rather than the substance of any decision.

immigrationprocedure

This case involves plaintiffs who refinanced their mortgages and alleged that Stewart Title Guaranty Company failed to apply a mandatory 40% reissue discount on title insurance premiums set by the Texas Department of Insurance, instead charging full Basic Rates and splitting the excess with its title agents. The plaintiffs claimed these practices violated section 8(b) of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2607(b), along with supporting state-law claims for unjust enrichment and money had and received. Stewart moved to dismiss under Rule 12(b)(6), arguing that the complaint did not sufficiently allege eligibility for the discount or improper fee splitting. The court denied the motion, reasoning that the reissue discount is mandatory, plaintiffs' allegations plausibly described splits of charges not for services actually performed, and no exhaustion of administrative remedies was required.

business & regulatoryproperty

This case involved a putative class of Blockbuster shareholders who purchased shares between September 2004 and August 2005, suing Blockbuster, its executives, Viacom, and related parties for alleged violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. The plaintiffs claimed that statements in the prospectus for Viacom's split-off of Blockbuster, press releases about business initiatives including the "No Late Fee" program, and various forward-looking statements about profitability and growth were materially false or misleading. The court granted the defendants' motions to dismiss under Federal Rule of Civil Procedure 12(b)(6), holding that the plaintiffs failed to state a cognizable claim. The core reasoning was that many statements were protected by the Private Securities Litigation Reform Act safe harbor for forward-looking statements with meaningful cautionary language, that plaintiffs did not adequately plead scienter or falsity, and that other statements were not materially misleading.

business & regulatory

In this case, plaintiff Robert Nelson sued the University of Texas at Dallas and several officials, including David E. Daniel in his official capacity, alleging that his termination violated the Family and Medical Leave Act after he took approved medical leave and failed to return to work. Nelson sought reinstatement and other injunctive relief against Daniel, relying on the Ex parte Young doctrine to overcome sovereign immunity by claiming a continuing violation of federal law. The court had previously dismissed the claims against Daniel, and on Nelson's motion to vacate that judgment under Federal Rule of Civil Procedure 59, it denied the motion. The court held that the motion was procedurally deficient because it raised new arguments that could have been presented earlier, and substantively deficient because a wrongful termination under the FMLA is a discrete, one-time act rather than a continuing violation that would allow prospective injunctive relief under Ex parte Young.

labor & employmentprocedurefederal power