The following are summaries of selected civil opinions issued by the Fifth Circuit in November and December 2024. The summaries are overviews of particular aspects of the opinions; please review the entire opinions.
COMMERCIAL SPEECH: How to apply the Central Hudson test when an activity is legal under state law but prohibited under supreme federal law.
Cocroft v. Graham, 2024 WL 4866863 (5th Cir. Nov. 22, 2024).
Mississippi enacted a law authorizing the sale and use of marijuana for medical purposes under a regulatory framework administered by state agencies. The Act provides certain limited opportunities for advertising, such as listings in business directories, the establishment of websites, and sponsorships for charity events.
The plaintiffs challenged Mississippi’s near-total prohibition on advertising medical marijuana on First Amendment grounds. The district court dismissed their claim, finding that commercial speech relating to marijuana transactions did not qualify for First Amendment protection since the underlying activity remained illegal under federal law.
The core question before the Fifth Circuit was whether medical marijuana advertising qualified for First Amendment protection as commercial speech. The court applied the Central Hudson test, a four-prong test established by the U.S. Supreme Court to evaluate restrictions on commercial speech. The first prong of Central Hudson requires that the commercial speech must concern “lawful activity” and must not be misleading.
The Court held that the plaintiffs’ advertising did not meet this threshold because all commercial activity related to marijuana remains illegal under federal law. The court emphasized that under the Supremacy Clause, federal law takes precedence over conflicting state law. Therefore, even though Mississippi state law permits medical marijuana under certain conditions, marijuana remains illegal in Mississippi, and thus the underlying activity is not “lawful” for purposes of First Amendment protection.
The plaintiffs advanced a “same-sovereign” theory, arguing that only the jurisdiction that has prohibited the underlying activity (in this case, federal authorities) could regulate related commercial speech. They asserted that because Mississippi permitted sale and use of medical marijuana under state law, it lacked authority to prohibit speech regarding its sale.
The Fifth Circuit rejected this argument, reasoning that Central Hudson’s first prong is focused on the status of the underlying activity in the relevant jurisdiction, not which sovereign prohibited it. Federal law is binding on all states through the Supremacy Clause, making the relevant question whether the proposed commercial activity is illegal under federal law.
PUBLIC ACCESS TO CRIMINAL PROCEEDINGS: Public’s right of access to criminal proceedings includes magistrations.
Texas Trib. v. Caldwell Cnty., 2024 WL 4799169, at *4 (5th Cir. Nov. 15, 2024)
Two non-profit news organizations sued Caldwell County to enjoin its practice of closing magistrations to the public. The district court issued a preliminary injunction and the Fifth Circuit affirmed, finding plaintiffs were likely to succeed on their claims.
The U.S. Supreme Court has long recognized the right of access to criminal trials as fundamental under the First Amendment. That right of access has subsequently been extended to various pretrial proceedings, such as suppression hearings and guilty plea hearings.
In determining whether a particular proceeding falls under the First Amendment’s protections, courts are instructed to employ a two-factor test referred to as the “experience and logic test.” The experience prong asks whether the place and process have historically been open to the press and general public. The logic prong asks whether public access plays a significant positive role in the functioning of the particular process in question. If the particular proceeding in question passes these tests of experience and logic, a qualified First Amendment right of public access attaches.
Although magistrations do not have the same extensive historical record as trials, the Fifth Circuit found that there is a meaningful tradition of openness for similar pretrial proceedings, such as bail hearings. The Court drew comparisons to bail hearings, which have a tradition of openness. The Court cited historical evidence, including statutes dating back to 16th century England and commentary on early American cases that emphasized the importance of public access to bail decisions.
In finding that magistrations satisfied the logic prong, the Court reasoned that public access to magistrations serves important purposes, including ensuring transparency and accountability in judicial decision-making. Magistrations are the point at which individuals are formally informed of the charges against them and may be released on bail. Public access to these proceedings can foster trust in the judicial system by allowing the public to scrutinize the fairness of decisions.
INTERNET: Section-230 immunity does not apply to sex-trafficking claims because those claims do not treat the defendant as a publisher or speaker of third-party content.
A.B. v. Salesforce, Inc., 2024 WL 5163222 (5th Cir. Dec. 19, 2024).
The defendant, Salesforce, is a business-software company providing cloud-based customer-relationship-management technology allowing businesses to organize their customer data on Salesforce’s servers. One of Salesforce’s clients was Backpage.com, a company that would go on to plead guilty to federal sex-trafficking charges.
Plaintiffs (victims of sex trafficking) filed suit against Salesforce, alleging violations of the federal Trafficking Victims Protection Act and related Texas state laws. Plaintiffs’ theory is that Salesforce violated those laws by supplying its tools, support, and resources to Backpage, thereby knowingly facilitating sex trafficking and directly enabling Backpage to function.
Salesforce argued that Section 230 of the Communications Decency Act (CDA) barred the claims, asserting that they effectively treated Salesforce as a publisher or speaker of third-party content on Backpage. The district court denied summary judgment on the 230-defense, and the Fifth Circuit affirmed on interlocutory appeal.
Section 230(c)(1) of the CDA provides that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” The statute shields online platforms from liability for content created by third parties.
Salesforce argued that because the only link between its conduct and plaintiffs’ harm was third-party speech, the plaintiffs’ claims effectively treated Salesforce as the publisher of that speech.
The Fifth Circuit rejected that argument as contrary to Section 230’s plain meaning and precedent.
The Court’s analysis of Section 230’s meaning focused on the phrase “treated as the publisher or speaker.” The Court concluded that the phrase did not bar all claims in which third-party speech lies somewhere in the chain of causation. Instead, the text demands a functional, claims-analysis approach to determine whether a claim seeks to hold a defendant liable for actions quintessentially related to a publisher’s role—deciding whether to publish, withdraw, postpone or alter content.
The Court therefore rejected Salesforce’s “only link” reading as akin to but-for causation. The Court explained that adopting Salesforce’s reading would cause Section 230 to encompass vastly more than claims that seek to treat a defendant as a publisher or speaker of third-party content.
Turning to the plaintiffs’ claims, the Court concluded that Section 230 was no bar. Plaintiffs’ claims assert Salesforce breached statutory duties to knowingly benefit from participation in a sex-trafficking venture. Those duties do not derive from Salesforce’s status or conduct as a publisher or speaker and would not require Salesforce to exercise publication or editorial functions to avoid liability.
CIVIL PROCEDURE: Verdict with inconsistent answers to written questions required new trial.
Lindsley v. Omni Hotels Mgmt. Corp., 123 F.4th 433 (5th Cir. 2024).
Lindsley filed suit under the Equal Pay Act (EPA) and Title VII, alleging that she had been subjected to sex-based pay discrimination at Omni. Both Title VII and the EPA prohibit pay discrimination on the basis of sex. And each establishes a burden-shifting framework. If the plaintiff shows she was paid less than men in a comparable position, the defendant may escape liability by showing that the wage differential was justified by any factor other than sex. After trial, the district court presented instructions and a verdict form to the jury for its deliberations. The verdict form consisted of a series of questions. Despite the claims’ similarity, the verdict forms for each differed.
The general instructions directed that the jury should answer damages questions only after finding Omni liable. But on the verdict form, only the EPA’s liability question included a specific instruction to stop if the answer was no.
Further, the verdict form separately asked if Lindsley’s pay differential was justified by any factor other than sex only as to the EPA claim. For the Title VII claim, the liability instruction explained that it is not unlawful for an employer to “pay one employee less than another for the same or similar work for other reasons, good or bad, fair or unfair,” (i.e., for reasons other than the employee’s sex).
The jury’s first verdict found that Omni had proved that any pay differential for Lindsley resulted from a factor other than sex. The jury thus held Omni not liable under the EPA and concluded that no damages should be awarded under the EPA. The jury’s verdict also answered “no” to the question on Title VII liability but nonetheless awarded $100,000 in compensatory damages and $25 million in punitive damages in the Title VII section.
Finding these answers inconsistent, the district court modified the verdict form to make Title VII damages expressly conditional on liability, and ordered the jury to further deliberate. The jury then returned a verdict identical to the previous one except answering “yes” to Title VII liability. The district court entered judgment in Lindsley’s favor on the Title VII claim.
Omni appealed and the Fifth Circuit vacated and ordered a new trial. The Fifth Circuit found that the jury’s answers to written questions on the second verdict remained inconsistent: While the answers to Title VII liability and damages matched, the affirmative answer to Title VII liability was irreconcilable with the jury’s finding on the EPA claim that Omni had proved that any pay differential for Lindsley resulted from a factor other than sex.
The Court rejected Omni’s arguments that the district court should have entered judgment in its favor based on the jury’s answers accompanying each verdict. The Court looked to Federal Rule of Civil Procedure 49, which guides treatment of verdicts. The Court categorized the verdict form as a general verdict with interrogatories—rather than special verdicts—because the jury was tasked with applying the law to the facts. This classification required the district court to follow Rule 49(b) in managing inconsistencies. Rule 49(b)(4) provides that when the interrogatory answers are inconsistent with each other and one or more is also inconsistent with the general verdict, judgment must not be entered. Instead, the Court must either direct the jury to further deliberate or order a new trial. The Court found that in both verdicts the jury’s answers were inconsistent with each other and the general verdict. As a result, the district court had no power to enter judgment on either verdict.