Federal Civil Court Update

By Jason LaFond

The following are summaries of opinions issued by the Fifth Circuit in April 2023. The summaries are overviews of particular aspects of the opinions; please review the entire opinions.

PRESERVATION: On remand from Supreme Court, Fifth Circuit allows appellant to raise new purely legal argument applying proper of level of scrutiny to speech restriction.

Reagan Nat’l Advert. of Austin, Inc. v. City of Austin, 64 F.4th 287 (5th Cir. 2023).

The City of Austin’s sign ordinance prohibits new off-premises signs and prohibits upgrades to existing off-premises signs.

No such restrictions apply to on-premises signs.

Reagan challenged this disparate treatment of off-premises signs as violating the First Amendment. In the district court, Reagan argued that the ordinance is a content-based restriction subject to and failing to satisfy strict scrutiny.

Austin argued that the disparate treatment is content-neutral and subject only to intermediate scrutiny, which it satisfies.

Reagan did not argue in the alternative that the ordinance fails intermediate scrutiny.

The district court agreed with Austin, the Fifth Circuit agreed with Reagan, and then the Supreme Court agreed with Austin.

On remand to the Fifth Circuit from the Supreme Court, Reagan argued for the first time that the ordinance failed intermediate scrutiny. Austin argued that Reagan had waived this argument.

The Fifth Circuit allowed the new argument.

The court first set forth the general rule that an appellant abandons all issues not raised and argued in its initial brief on appeal. In exceptional circumstances, however, that rule gives way. After all, the court explained, the refusal to consider arguments not raised is a sound prudential practice, rather than a statutory or constitutional mandate, and there are times when prudence dictates the contrary.

The court found that remand from the Supreme Court is an exceptional circumstance. It did not matter that the Supreme Court did not change the law—its clarification of prior precedent was enough.

The court also independently concluded that it may consider the waived argument because it presents a pure legal question and considering the argument will not prejudice Austin, as Austin has argued throughout the case that the ordinance satisfies intermediate scrutiny.

On the merits, the court upheld the ordinance.

Spano v. Whole Foods, Inc., 65 F.4th 260 (5th Cir. 2023).

FEDERAL PREEMPTION: Food, Drug, and Cosmetic Act (FDCA) does not preempt Texas common-law tort claims arising from mislabeled cupcake.

The Spanos’s child, C.S., is allergic to dairy, tree nuts, and fish. C.S. experienced a severe allergic reaction after consuming a cupcake allegedly mislabeled as “vegan” by a Whole Foods store.

The Spanos sued Whole Foods under theories of negligence and strict liability, partly relying on federal labeling requirements to establish Whole Foods’s negligence.

The district court granted Whole Foods’s motion to dismiss, holding that the Spanos’s suit was impliedly preempted by the FDCA.

The Fifth Circuit reversed.

The court first held that implied conflict preemption under the FDCA was an available defense to the Spanos’s claim. The court rejected the Spanos’s contrary argument, which relied on construction notes accompanying the FDCA that purport to limit preemption to the terms of the act’s express-preemption provision. The court held that those notes preclude only field preemption, not implied conflict preemption.

Applying Supreme Court precedent blessing state-law claims that merely “parallel”—but do not add to—FDCA requirements, the court found that the Spanos’s claims as pleaded were not preempted.

The court left open the possibility that the Spanos’s claims could come into conflict with the FDCA as the case develops. As pleaded, however, the claims survive a motion to dismiss.

The court explained that each of the Spanos’s claims is properly a recognized state tort claim rather than a freestanding federal cause of action based on a violation of the FDCA’s provisions or FDA regulations. Further, while each of the causes of action references violations of FDA regulations, those violations are properly used only as evidence to show breach of the stated duty.

Jason LaFond is an Austin-based appellate litigator with significant experience before the Fifth Circuit. He is senior counsel at Yetter Coleman LLP.