The following are summaries of selected civil opinions issued by the Fifth Circuit in February 2025. The summaries are overviews of particular aspects of the opinions; please review the entire opinions.
Editor’s Note: This is Jason LaFond’s final Federal Civil Update for Austin Lawyer. We sincerely appreciate his insight and tireless work in keeping our members updated on federal issues.
FINANCIAL INSTITUTIONS: Annuzio-Wylie Act’s safe harbor provision protected bank from liability for reporting suspected violation of state law to Cattle Raisers Association special agent.
In re Kerns, 2025 WL 651459 (5th Cir. Feb. 28, 2025).
Glade Creek Livestock, LLC obtained a loan from First State Bank, using equipment and over 200 cattle as collateral. Matthew Kerns, the sole member of Glade Creek, personally guaranteed the loan.
First State Bank later discovered that some of the cattle collateral were missing and demanded full repayment. Kerns admitted that he sold the cattle.
Kerns filed for bankruptcy protection. While the bankruptcy’s automatic stay was in place, First State Bank contacted a special ranger of the Texas and Southwestern Cattle Raisers Association to report the theft of its collateral—a crime under Texas law. Kerns was arrested and charged with hindering a secured creditor.
Kerns responded with an adversary proceeding in bankruptcy court, claiming First State Bank’s report to the Cattle Raisers Association’s special agent violated the automatic stay. First State moved for summary judgment, arguing it was immune from liability under the safe harbor provision of the Annuzio-Wylie Act.
The Annunzio-Wylie Act is an anti-money laundering law requiring financial institutions to report any suspicious transactions that may violate any law or regulation. The law includes a safe harbor shielding financial institutions from all liability stemming from that disclosure.
The bankruptcy court granted First State’s motion, which the district court affirmed. Kerns appealed and the Fifth Circuit also affirmed.
The primary issue on appeal was whether a report to a special agent of the Cattle Raisers Association satisfied the safe harbor.
The Fifth Circuit looked to the safe harbor’s text and the Federal Reserve’s and FDIC’s regulations, which protect a financial institution when it makes a voluntary disclosure of a possible violation of a law or regulation to a government agency, law enforcement, or financial institution supervisory authority. Kerns argued that a special agent of the Cattle Raisers Association is not law enforcement, but the Court disagreed.
The Fifth Circuit first concluded that “law enforcement” includes state and local law enforcement, not just federal authorities.
The Fifth Circuit next looked to the status of a Cattle Raisers Association special agent. The Court examined Texas law and determined that Cattle Raisers Association special rangers qualify as law enforcement officers, as they: (1) are appointed by the Texas Department of Public Safety; (2) have the authority to make arrests and investigate livestock theft; and (3) must meet the same certification standards as other Texas peace officers.
APPELLATE JURISDICTION: District court’s failure to rule on request to preliminarily enjoin agency proceeding before discovery conference in that proceeding was not effective denial of the preliminary injunction.
Space Expl. Techs., Corp. v. Nat’l Lab. Rels. Bd., 2025 WL 703687 (5th Cir. Mar. 5, 2025)
In 2022, several SpaceX employees drafted and widely circulated an open letter criticizing CEO Elon Musk and company culture. SpaceX terminated four employees for violating company policies and later discharged additional employees for alleged dishonesty during an internal leak investigation. Those employees filed unfair labor practice charges with the National Labor Relations Board, claiming their terminations were retaliatory.
On Jan. 3, 2024, the NLRB issued a consolidated administrative complaint and scheduled a hearing for March 5, 2024, which was later postponed indefinitely pending resolution of several subpoena disputes.
On Jan. 4, 2024, SpaceX sued the NLRB in the Southern District of Texas challenging the constitutionality of the proceeding and requesting a preliminary injunction. SpaceX did not request expedited briefing.
On Feb. 15, the district court granted the NLRB’s motion to transfer. SpaceX then sought mandamus in the Fifth Circuit, which the Court denied.
Before the district court’s transfer order was effectuated, SpaceX asked the district court to reconsider its transfer order or resolve the preliminary injunction before transfer.
On April 24, SpaceX learned that an NLRB administrative law judge had scheduled a teleconference on May 2 to address discovery issues but that SpaceX was not expected to produce any evidence before or during that call. On April 26, SpaceX requested a ruling from the district court on the preliminary injunction no later than May 2. On April 30, SpaceX noticed its appeal.
The Fifth Circuit dismissed the appeal, finding that the district court’s refusal to rule on the preliminary injunction before SpaceX appealed was not an effective denial.
The court applied Carson v. American Brands, Inc., 450 U.S. 79 (1981), which allows interlocutory appeals under § 1292(a)(1) only if a court’s order (or inaction) causes “serious, perhaps irreparable consequences.” SpaceX argued that participating in an unconstitutional NLRB proceeding constituted irreparable harm. The Court disagreed: Fifth Circuit precedent holds that defending against an administrative charge does not constitute irreparable harm warranting interlocutory appeal.
The Fifth Circuit also rejected SpaceX’s argument that the district court’s delay was an effective denial. The Court faulted SpaceX for failing to request expedited briefing and for appealing before the deadline it presented to the district court. The Court concluded that the district court was permitted to await the resolution of SpaceX’s mandamus proceeding. Likewise, the district court was free to resolve venue before addressing the injunction.