Court Opinion

ID: 2677670
Source: CourtListenerOpinion
Date Created: 2014-06-10 05:00:34.227793+00
Date Added: 2024-06-11T09:35:47.848413
License: Public Domain

Case: 13-10519      Document: 00512656064         Page: 1    Date Filed: 06/09/2014

           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT
                                                                          United States Court of Appeals
                                                                                   Fifth Circuit
                                      No. 13-10519                               FILED
                                                                              June 9, 2014
                                                                            Lyle W. Cayce
                                                                                 Clerk
EAGLE SUSPENSIONS, INCORPORATED,

                                                 Plaintiff – Appellee
v.

HELLMANN WORLDWIDE LOGISTICS, INCORPORATED,

                                                 Defendant – Appellant

                   Appeal from the United States District Court
                        for the Northern District of Texas
                              USDC No. 3:12-CV-611

Before DAVIS, BARKSDALE, and ELROD, Circuit Judges.
PER CURIAM:*
       This case involves a contract for the carriage of two industrial presses to
Oklahoma from Mexico. Eagle originally purchased the presses for use in
Oklahoma, and Hellmann is a freight forwarder who was hired to arrange
carriage. As both parties agree, the presses never left Mexico and were never
delivered to Eagle. After a jury trial, Hellmann was found liable to Eagle for
breach of contract and breach of fiduciary duty under Texas law. On appeal,
Hellmann asks us to vacate the district court’s judgment and remand for a new

       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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                                        No. 13-10519
trial based on one challenge to an evidentiary ruling and three purported
errors in the jury instructions.
       First, Hellmann argues that the district court violated Rule 411 of the
Federal Rules of Evidence by allowing questions during trial related to
Hellmann’s purchase of insurance. Second, Hellmann argues that the jury
instructions included claims under Texas law that are preempted under
federal common law. Third, and in the alternative to its preemption argument,
Hellmann argues that the jury instructions misstated the relevant rule of
Texas law governing the foreseeability of consequential damages. Fourth,
Hellmann argues that the jury instructions misallocated the burden of proof
for demonstrating a breach of fiduciary duty under Texas law.
       For the reasons set forth below, we reject each of Hellmann’s four
arguments and affirm the district court’s judgment.
                                               I.
       On February 29, 2012, Eagle filed a complaint with the district court
containing three distinct claims against Hellmann under federal law and
Texas law. Eagle claimed first that, by failing to deliver the industrial presses,
Hellmann had violated a rule of federal common law governing “non-delivery
of goods” in cases involving cross-border shipping. This rule of federal common
law, according to Eagle’s position at the time (and Hellmann’s position now),
operates to extend “the principles and framework set out in the Carmack
Amendment to the Interstate Commerce Act” to cover cross-border shipments
that are not actually covered by the Carmack Amendment’s literal text. 1

       1 Neither party ever contended during the proceedings before the district court that
the present case—a shipment by truck originating in Mexico, as to which the loss also
occurred in Mexico—falls within the literal scope of the Carmack Amendment. See 49 U.S.C.
§ 14706 (limiting its effects to “loss or injury” caused with respect to the shipment of property
“in the United States or from a place in the United States to a place in an adjacent foreign
country”). We therefore assume without deciding that the present case does not fall under
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                                    No. 13-10519
Second, Eagle claimed that Hellmann had committed a breach of contract
under Texas law.        Third, Eagle claimed that Hellmann had breached a
fiduciary duty arising under Texas law based on the parties’ agency
relationship.
      Hellmann filed its original answer on April 4, 2012. The answer denied
a number of Eagle’s specific allegations and raised several defenses. But
Hellmann’s answer did not raise any defenses related to federal preemption.
Nor did Hellmann make any mention of the applicable law in its original
answer.
      Hellmann did not file a motion to dismiss in this case. On August 31,
2012, both Hellmann and Eagle filed motions for summary judgment, at which
point the applicable law became one of the central questions in the lawsuit.
Initially, Hellmann argued in its motion for summary judgment that federal
law was inapplicable because, in Hellmann’s view, the literal text of the
Carmack Amendment does not cover shipments originating in a foreign
country. Instead, Hellmann argued, Florida law should apply under Texas’s
choice-of-law rules. Eagle, by contrast, argued in its own motion for summary
judgment that federal common law should apply to Eagle’s claim for non-
delivery, whereas Texas law should apply to Eagle’s claims for breach of
contract and breach of fiduciary duties. Finally, in Hellmann’s response to
Eagle’s motion, Hellmann argued—for the first time—that Eagle’s claims for
breach of contract and breach of fiduciary duty are preempted by the same
body of federal common law invoked by Eagle in support of the federal claim
for non-delivery.

49 U.S.C. § 14706 itself. In the present case, we need only address the parties’ distinct
disagreement regarding federal common law based on the Carmack Amendment, which was
raised in the district court (though never ruled upon explicitly).
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      On December 20, 2012, the district court issued a one-page order denying
both parties’ motions for summary judgment because “these motions
present[ed] genuine issues of material fact.” The district court’s brief order did
not address any questions relating to the applicable law or federal preemption.
      The parties prepared for trial.         On January 25, 2013, Hellmann
submitted a proposed jury charge reflecting the positions regarding federal
common law and federal preemption that Hellmann had first adopted during
the summary judgment briefing. That is, Hellmann’s proposed jury charge
lacked any jury instruction based on Texas law, and had no jury instruction at
all pertaining to breach of contract or breach of fiduciary duty. Hellmann’s
proposed jury charge also stipulated “that [Hellmann] did not deliver to [Eagle]
the two presses that are at issue in this case.” Hellmann’s proposed jury charge
would therefore have submitted only issues relating to mitigation and the
amount of damages for consideration by the jury. Subsequently, on February
6, 2013, the parties jointly filed a proposed pretrial order, in which Hellmann
again repeated its argument that “principles of national uniformity . . .
warrant[] the application of federal common law instead of state law” in this
case. Finally, during a pretrial conference on February 8, 2013, the district
court acknowledged the parties’ dispute regarding federal preemption, but also
explicitly postponed decision of that question. Indeed, there was no motion
relevant to the question of federal preemption pending before the district court
at the time of the pretrial conference.
      The district court also heard argument at the pretrial conference
regarding the application of Rule 411 of the Federal Rules of Evidence in the
context of Hellmann’s pending motion in limine.         As Hellmann’s attorney
acknowledged during the pretrial conference, however, Hellmann itself
intended to introduce evidence during trial to show “that Hellman offered
Eagle the opportunity to get insurance” and that Eagle had not done so.
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      Trial began on March 18, 2013. Prior to jury selection, the district court
made its final ruling regarding the introduction of evidence relating to the
parties’ insurance under Rule 411. As the district court explained, it would be
inappropriate to “prohibit either side from raising the question of insurance in
this case,” given Hellmann’s understanding that “one of the main issues in this
case is who had the obligation to pay insurance when that was never
apparently negotiated explicitly between the parties.”       The district court
therefore ruled that both parties would be permitted to introduce evidence
relating to insurance.
      On the second day of trial, on March 19, 2013, the district court
distributed copies of the draft jury charge and verdict form to the parties. At
this time, the district court asked the parties to return those copies to the
district court on the following day and “attach sheets of paper” or make
“comments in the margin” expressing any objections, which the district court
would then use to compose the final jury charge and verdict form. The district
court also assured the parties that they would have an opportunity to object
formally on the record “after the jury has been charged,” but emphasized that,
“as a practical matter, [the parties’] ability to influence what’s in the charge
[wa]s really this informal process of commenting [in the draft’s margins] rather
than making [the] formal objections for the record.” The district court’s draft
copy of the jury charge and verdict form contained claims under Texas law for
breach of contract and breach of fiduciary duty, as well as a claim entitled
“Federal Common Law Non-Delivery.”
      On March 20, 2013, in accordance with the district court’s instructions,
both parties submitted their comments and proposed revisions to the district
court. The parties’ submissions were formally docketed and preserved in the
record. Hellmann’s submission included extensive comments in the margins
of the draft jury charge and verdict form, as well as an additional twelve pages
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of written comments and alternative verdict questions.                          Hellmann’s
submission made no mention, however, of federal preemption.
       After the parties had made their closing arguments, the jury was
charged in the afternoon on March 20, 2013. Like the draft version, the final
verdict form also contained claims under Texas law for breach of contract and
breach of fiduciary duty, as well as the claim for “Federal Common Law Non-
Delivery.” According to the final verdict form, consequential damages awarded
pursuant to the claim for breach of contract must be “proximately caused by
the defendant Hellmann’s failure to comply with the agreement” under Texas
law. The final verdict form also explained that, “[i]f Hellmann was Eagle’s
agent or if a relationship of trust and confidence existed between Eagle and
Hellmann, then Hellmann must show it complied with its fiduciary duties.”
       The jury then left the courtroom to deliberate. At this time, out of the
hearing of the jury, the district court asked to hear the parties’ “objections, if
any, to [the] instructions given to the jury” and invited the parties “to state
more at greater length for the record what [the] objection is,” in accordance
with the procedure explained the previous day. In response to this invitation
from the district court, Hellmann’s lawyer replied: “Your Honor, let me state
that all of the defendant’s objections were contained in its comprehensive
inserts and comments in the jury charge. We’ll stand on that.”
       After concluding deliberations on March 20, 2013, the jury returned a
verdict that found Hellmann liable for all three claims: breach of contract,
breach of fiduciary duty, and non-delivery of goods. 2                 The jury awarded

       2 The verdict form included a series of questions regarding liability and damages. The
jury answered “yes” to the questions concerning the existence of a contract and Hellmann’s
failure to comply with the contract. The jury also answered “yes” to whether Eagle had
proved that Hellmann was Eagle’s agent and “no” to whether Hellmann had proved that it
complied with its fiduciary duties to Eagle. Finally, the jury answered “yes” to whether Eagle
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                                  No. 13-10519
damages based on the industrial presses’ replacement cost and Eagle’s loss of
use of the industrial presses. The jury also awarded damages for “Hellmann’s
failure to comply with its fiduciary duties” and for “malice, fraud, or gross
negligence on the part of Hellmann.”
      The parties made no written motions for new trial or judgment as a
matter of law under Rule 50 of the Federal Rules of Civil Procedure. Hellmann
did make an oral motion under Rule 50 based on the absence of evidence
showing a principal-agent relationship and the absence of evidence showing
gross negligence. The district court denied this motion from the bench, and
this ruling has not been appealed.
                                        II.
      Hellmann first challenges the district court’s decision to permit the
questioning of witnesses on matters relating to insurance. This court reviews
a district court’s evidentiary rulings for abuse of discretion. 3 A district court
abuses its discretion by basing its ruling on an erroneous view of the law or a
clearly erroneous assessment of the evidence. 4     Even if there is an abuse of
discretion, the district court’s error is harmless and not reversible “unless the
ruling affected substantial rights of the complaining party.” 5
      In this case, the district court did not abuse its discretion by deciding to
permit the questions regarding insurance. In its ruling from the bench prior
to trial, the district court gave due consideration to Rule 411 of the Federal
Rules of Evidence, which prohibits admission of evidence regarding liability
insurance “to prove whether the person acted negligently or otherwise
wrongfully.” As the district court explained, Hellmann had itself argued that

sustained damages as a result of Hellmann’s failure to deliver the presses to their
destination.
       3 Baisden v. I’m Ready Prods., Inc., 693 F.3d 491, 508 (5th Cir. 2012).
       4 Bocanegra v. Vicmar Servs., Inc., 320 F.3d 581, 584 (5th Cir. 2003).
       5 Id.

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                                  No. 13-10519
“one of the main issues in this case is who had the obligation to pay insurance
when that was never apparently negotiated explicitly between the parties.” In
the district court’s view, it would therefore be inappropriate to “prohibit either
side from raising the question of insurance in this case.” Indeed, at the pretrial
conference on February 8, 2013, Hellmann’s own attorney had stated that “I
don’t know how I prove that the terms and conditions are enforceable unless I
prove that [Hellmann] offered [Eagle] the opportunity to get insurance,” and
emphasized that “most certainly, I am going to have to talk about insurance.”
Accordingly, the district court held that both sides should be permitted to raise
issues relating to insurance during the trial, and both sides did so frequently.
      This court has upheld similar rulings in several cases.            In DSC
Communications Corp. v. Next Level Communications, 107 F.3d 322, 329 (5th
Cir. 1997), this court held that it was not an abuse of the district court’s
discretion to deny an objection based on Rule 411 of the Federal Rules of
Evidence where an indemnity agreement “was an integral part of the
relationship between the parties in this litigation.” This court also explained
in Savoie v. Otto Candies, Inc., 692 F.2d 363, 369 (5th Cir. 1982), that “evidence
that a person has liability insurance may be admissible when it is relevant to
some disputed matter other than simply whether that person acted negligently
or otherwise wrongfully.” In Dicks v. Cleaver, 433 F.2d 248, 254 (5th Cir. 1970),
this court likewise held that the “usual rule” against evidence of “liability
insurance . . . must give way where the fact of insurance has arguably an
independent, substantive evidentiary relevance.”
      The district court’s decision to allow both parties to discuss insurance
measures correctly reflected this body of case law. It also did not reflect a
“clearly erroneous assessment of the evidence.” 6 Although Hellmann argued

      6   See id.
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before the district court—and has now argued before this court—that there is
a “distinction between property insurance and liability insurance,” it has cited
no authority indicating that this distinction is relevant under Rule 411 of the
Federal Rules of Evidence. Moreover, even if there is merit to this distinction,
Hellmann never requested a limiting instruction during trial that would have
enabled the jury to consider the evidence regarding insurance only for
permissible purposes.       Where “counsel never requested a more complete
limiting instruction,” the district court “cannot [be] fault[ed] . . . for failing to
give one spontaneously.” 7
      Hellmann therefore has failed to demonstrate either that the district
court had a flawed understanding of the law, or clearly erred in its assessment
of the evidence. Accordingly, this court has no basis on which to reverse the
district court’s evidentiary ruling for abuse of discretion. 8
                                          III.
      The remaining issues in this appeal relate to the district court’s jury
instructions. Where a party properly objects to a jury instruction before the
district court under Rule 51 of the Federal Rules of Civil Procedure, this court
reviews the district court’s jury instructions for abuse of discretion. 9 Under
the abuse-of-discretion standard, “‘[a] challenge to jury instructions must
demonstrate that the charge as a whole creates substantial and ineradicable
doubt whether the jury has been properly guided in its deliberations. . . . Even
if the challenger proves the instructions misguided the jury, we reverse only if
the erroneous instruction affected the outcome of the case.’” 10

      7  United States v. Stevens, 38 F.3d 167, 170 (5th Cir. 1994).
      8  See Baisden, 693 F.3d at 508; Bocanegra, 320 F.3d at 584.
      9 Neely v. PSEG Texas, Ltd. P’ship, 735 F.3d 242, 244 (5th Cir. 2013).
      10 Price v. Rosiek Const. Co., 509 F.3d 704, 708 (5th Cir. 2007) (quoting Thomas v.

Texas Dep’t of Criminal Justice, 297 F.3d 361, 365 (5th Cir. 2002)).
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       However, as we emphasized in our decision in Jimenez v. Wood County,
Texas, 660 F.3d 841, 845-46 (5th Cir. 2011) (en banc), we review under the
plain-error standard where a party fails to object in accordance with the
“timing requirement” imposed on litigants under Rule 51. That is, a district
court must provide an opportunity for parties to object to the proposed jury
instructions “after the court announces its proposed instructions, and before
the instructions and arguments are delivered.” 11 If a party does not make its
objection specifically at this time, then appellate consideration of the party’s
challenge to the district court’s jury instruction is limited to review under the
plain-error standard. 12
       Under the plain-error standard, a jury instruction must be upheld unless
it contains “an obviously incorrect statement of law, . . . that ‘was probably
responsible for an incorrect verdict, leading to substantial injustice.’” 13 To rise
to the level of obviousness constituting plain error, a legal error must not be
“‘subject to reasonable debate.’” 14          Even where a party’s challenge merely
requires extending existing precedent, the district court’s failure to do so is not

       11  Jimenez, 660 F.3d at 845-46.
       12  Garriott v. NCsoft Corp., 661 F.3d 243, 248-49, and n.4 (5th Cir. 2011) (“[I]t would
be unjust to allow [a litigant] to sit back during trial, observe [the other party]’s litigation
strategy, and then demand a new trial . . . when it dislikes the verdict.”). See also Booker v.
Massachusetts Dep’t of Pub. Health, 612 F.3d 34, 40-41 (1st Cir. 2010) (“The requirements of
Rule 51 are not to be taken lightly and there is a high price to be paid for noncompliance.
Failure to comply with the rule ordinarily results in forfeiture of the objection to which the
failure relates, and we review forfeited objections only for plain error.” (citations and internal
quotation marks omitted)); Griffin v. Foley, 542 F.3d 209, 221 n.17 (7th Cir. 2008) (“The pre-
2003 rule allowed a timely objection at any time before the jury retires to consider its verdict,
whereas the rule now requires a party to object at the opportunity provided by the court
before the instructions and arguments are delivered.” (citations and internal quotation marks
omitted)).
        13 Tompkins v. Cyr, 202 F.3d 770, 784 (5th Cir. 2000) (quoting Automotive Group v.

Central Garage, Inc., 124 F.3d 720, 730 (5th Cir. 1997)). See also Nero v. Indus. Molding
Corp., 167 F.3d 921, 932 (5th Cir. 1999).
        14 Jimenez, 660 F.3d at 847 (quoting United States v. Ellis, 564 F.3d 370, 377-78 (5th

Cir. 2009)).
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plain error. 15    An important caveat, as the Supreme Court explained in
Johnson v. United States, 520 U.S. 461, 468 (1997), is that under plain-error
review the obviousness of the legal error is to be adjudged based on the clarity
of the law “at the time of appellate consideration.” 16
                                             A.
       With respect to its argument regarding federal preemption, Hellmann
failed to satisfy the “timing requirement” of Rule 51. 17 As reflected in the
record and confirmed by Hellmann’s lawyer during oral argument before this
court, Hellmann never raised its federal preemption argument at any time
between the pretrial conference on February 8, 2013, and the present appeal.
On March 19, 2013, the district court provided the parties with a draft copy of
the proposed jury instructions and an opportunity to make written objections.
Hellmann availed itself of this opportunity, but Hellmann’s written submission
contained no objection relating to the applicable law or federal preemption.
       Later, when the district court gave the parties an opportunity in open
court to speak more expansively about their written objections, Hellmann
again declined to raise the issue of federal preemption. As Hellmann’s lawyer
explained, “all of the defendant’s objections were contained in its
comprehensive inserts and comments in the jury charge,” and Hellmann was
satisfied to “stand on that.” Essentially, Hellmann now argues that the district
court should have recalled Hellmann’s federal preemption argument from
January and February 2013 when drafting the final jury instructions on March
20, 2013, even though Hellmann itself never referenced this federal

       15 United States v. Guzman, 739 F.3d 241, 246 n.8 (5th Cir. 2014) (citing United States
v. Garcia-Rodriguez, 415 F.3d 452, 455 (5th Cir. 2005)).
       16 Jimenez, 660 F.3d at 847 n.10 (analyzing the Johnson exception in the context of

plain-error review under Rule 51 in a civil case).
       17 See id. at 845-46.

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preemption argument in Hellmann’s objections to the proposed jury
instructions.
       Accordingly,     this    aspect    of     the   present    case    is   materially
indistinguishable from Jimenez.            In that case, the objecting party also
“assert[ed] that it sufficiently alerted the district court to its objection by
mentioning [the grounds for its objection] during a pre-trial conference.” 18 But
as the en banc court held in that case, a party cannot merely rely on “‘the fact
that the court is already aware of its position as an excuse for a failure to make
a specific, formal objection at the charge conference.’” 19 Rule 51 specifically
requires parties to make their objections after the proposed jury charge has
been drafted and distributed for comment.
       In this case, therefore, we review Hellmann’s argument regarding
federal preemption for plain error. 20            Under this standard, Hellmann’s
argument cannot prevail. “The plain error exception is designed to prevent a
miscarriage of justice where the error is clear under current law.” 21 But the
existing law is far from clear regarding the preemptive effect of federal common
law in instances where, as in the present case, a shipment originates outside
the United States and is lost before crossing the border.
       The most relevant provision of the Carmack Amendment, now codified
at 49 U.S.C. § 14706, 22 applies to shipments “from a place in the United States
to a place in an adjacent foreign country.”              Hellmann argues that “the

       18 See id.
       19 Id. at 845-46 n.7 (quoting 9 James Wm. Moore et al., Moore’s Federal Practice §
51.33 (3d ed. 2008)).
       20 See Garriott, 661 F.3d at 248-49, and n.4; Booker, 612 F.3d at 40-41; Griffin, 542
F.3d at 221 n.17.
       21 Taita Chem. Co., Ltd. v. Westlake Styrene, LP, 351 F.3d 663, 668 (5th Cir. 2003).

See also Navigant Consulting, Inc. v. Wilkinson, 508 F.3d 277, 296 (5th Cir. 2007).
       22 Man Roland, Inc. v. Kreitz Motor Exp., Inc., 438 F.3d 476, 478 (5th Cir. 2006);

Hoskins v. Bekins Van Lines, 343 F.3d 769, 777 n.6 (5th Cir. 2003).
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principles and framework set out in the Carmack Amendment to the Interstate
Commerce Act” should also be judicially extended as a matter of federal
common law to cover shipments that do not fall within the Carmack
Amendment’s literal scope. 23 Hellmann also argues that this federal common
law should preempt all state law remedies.                But Hellmann has cited no
controlling precedent in support of these far-reaching propositions. Rather,
Hellmann cites a single case directly on point, Ingram Micro, Inc. v. Airoute
Cargo Exp., Inc., 154 F. Supp. 2d 834, 839 (S.D.N.Y. 2001). In that case, a
district court held that federal common law should apply to a ground shipment
originating in Canada simply because “most forms of interstate transportation
are governed by federal law that has entirely preempted state regulation of
common carriers.” The district court in Ingram, 154 F. Supp. 2d at 839, also
drew an analogy between the Carmack Amendment and the Warsaw
Convention, a multilateral treaty governing the international carriage of
passengers, baggage, and cargo by air. 24
       Whether or not the Ingram court’s reasoning by analogy is logical and
persuasive, the district court in the present case was not bound by the Ingram
court’s holding. Moreover, in the absence of any additional case law supporting
the Ingram court’s unique position, we cannot say that the question addressed
by the Ingram court should clearly be decided in Hellmann’s favor. In fact, in
its most relevant decision, Kawasaki Kisen Kaisha Ltd. v. Regal-Beloit Corp.,
561 U.S. 89, 103 (2010), the Supreme Court explicitly left open a similar
question regarding whether the Carmack Amendment “applies to goods

       23  We emphasize again that we are not called upon to determine whether the events
of the present case—involving a shipment by truck originating in Mexico, as to which the loss
also occurred in Mexico—actually do or do not fall within the literal scope of the Carmack
Amendment, 49 U.S.C. § 14706. Because neither party made this argument before the
district court, we need not decide this question.
        24 See Chan v. Korean Air Lines, Ltd., 490 U.S. 122, 123-24 (1989).

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initially received in Canada or Mexico, for import into the United States.” For
their part, some district courts in our circuit have held that the Carmack
Amendment itself does not apply to shipments originating in foreign
countries. 25 Other district courts have held that the Carmack Amendment
itself does apply only “to the domestic portion of shipments from a foreign
country into the United States,” which would exclude the present case where
the loss occurred in Mexico. 26 But Hellmann has not identified any district
courts in our circuit that have addressed Hellmann’s theory based on federal
common law.
       As for our own court, although we have addressed the preemptive effect
of the Carmack Amendment itself, 27 we also have never addressed the
applicability of such preemption to shipments that originate outside the United
States. At best, therefore, Hellmann’s arguments regarding federal common
law and federal preemption suggest that the district court might have erred by
failing to extend existing precedent.             As stated above, however, we have
frequently held that failing to extend existing precedent does not constitute
“plain error.” 28
       Accordingly, even if the district court did commit a legal error in this case
by instructing the jury based on Texas law, such error would not have been

       25  See, e.g., Golden Logistics, S.A. de C.V. v. Danny Herman Trucking, Inc., CIV.A. L-
11-42, 2011 WL 3567521, at *2 (S.D. Tex. Aug. 12, 2011) (“Carmack does not apply to an
intermodal carriage from Germany to a destination within the United States. . . . Carmack
does not apply if the Laredo–to–[Kentucky] journey was part of a larger carriage from Mexico
covered by a through bill of lading.”).
        26 Audio Visual Servs. Corp. v. Felter Int’l, Inc., CIV.A. H-05-0381, 2006 WL 1030078,

at *1 (S.D. Tex. Apr. 18, 2006). See also Northern Marine Underwriters, Ltd. v. FBI Exp.,
Inc., CIV.A. H-08-2549, 2009 WL 7326068, at *4 (S.D. Tex. Apr. 20, 2009) (“The Court, in
light of the clear statutory language limiting the Carmack Amendment to claims that arise
in the domestic leg of foreign shipments, holds, that Plaintiff has no Carmack Amendment
claim against the Defendants.”).
        27 Hoskins, 343 F.3d at 778.
        28 Guzman, 739 F.3d at 246 n.8; Garcia-Rodriguez, 415 F.3d at 455.

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“clear or obvious,” but would rather have been “subject to reasonable debate.” 29
Under       such    circumstances,      Hellmann’s       argument       regarding      federal
preemption gives us no basis to reverse the district court’s judgment under the
plain-error standard.           We therefore decline to make any definitive
pronouncement on the applicability of the Carmack Amendment or federal
common law based on the Carmack Amendment where a shipment originates
outside the United States and the loss occurs before crossing the border.
                                              B.
       Hellmann also challenges the district court’s instruction regarding
damages resulting from Eagle’s “loss of use” of the industrial presses. Such
damages       are   “frequently,     but    not    categorically”     held    to   constitute
consequential damages under Texas law. 30 As the Supreme Court of Texas
held in Arthur Andersen & Co. v. Perry Equipment Corp., 945 S.W.2d 812, 816
(Tex. 1997), “[c]onsequential damages . . . result naturally, but not necessarily,
from the defendant’s wrongful acts” and “need not be the usual result of the
wrong, but must be foreseeable . . . .”               As Hellmann correctly observes,
therefore, “[f]oreseeability is a fundamental prerequisite to the recovery of
consequential damages for breach of contract” under Texas law. 31
       Hellmann argues that the jury instruction relating to Eagle’s “loss of
use” of the industrial presses was an incorrect statement of law because it did
not indicate that such damages must be “reasonably foreseeable.”                             In
considering this challenge, it is irrelevant in the present case whether

       29  Jimenez, 660 F.3d at 847; Tompkins, 202 F.3d at 784. See also Colley v. CSX
Transp., Inc., 376 F. App’x 387, 390-91 (5th Cir. 2010) (concluding that, where a question of
Mississippi law had not been settled by the Mississippi Supreme Court, a district court’s
failure to provide the requested jury instruction was not plain error).
        30 Powell Elec. Sys., Inc. v. Hewlett Packard Co., 356 S.W.3d 113, 121 (Tex. App. 2011).
        31 See Basic Capital Mgmt., Inc. v. Dynex Commercial, Inc., 348 S.W.3d 894, 901 (Tex.

2011).
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                                      No. 13-10519
Hellmann properly complied with Rule 51 during proceedings before the
district court. Even under the abuse-of-discretion standard, the district court’s
explanation of consequential damages created no “substantial and ineradicable
doubt” as to whether the jury was properly guided on the law. 32 Nor does it
appear that the instruction affected “the outcome of the case.” 33 We therefore
must reject Hellmann’s second challenge.
       First, the jury instruction as written was not erroneous. That is, while
the jury instruction did not state explicitly that the damages awarded for
“Eagle’s loss of use of the presses” must be reasonably foreseeable, the jury
instruction did provide that such damages must have been “proximately
caused by the defendant Hellmann’s failure to comply with the agreement.” As
decisions by numerous Texas courts explain, one of “[t]he two elements of
proximate cause” is foreseeability. 34 In particular, Texas courts equate proof
of proximate cause with “‘a foreseeability showing’” specifically “‘in the context
of special or consequential actual damages.’” 35 The relationship between these
two concepts is also confirmed by Texas Pattern Jury Charge 100.12.
       It is true, of course, that “proximate cause” is a legal term of art and, as
this court previously held in United States v. Anderton, 629 F.2d 1044, 1048-
49 n.5 (5th Cir. 1980), “[t]he better practice would be to instruct the jury on the
meaning of all terms of operative significance . . . .” But this court has also
consistently held that the trial judge should be afforded “substantial latitude

       32  See Price, 509 F.3d at 708 (quoting Thomas, 297 F.3d at 365).
       33  See id.
        34 Transcon. Ins. Co. v. Crump, 330 S.W.3d 211, 222-23 (Tex. 2010); IHS Cedars

Treatment Ctr. of DeSoto, Texas, Inc. v. Mason, 143 S.W.3d 794, 798-99 (Tex. 2004).
        35 PopCap Games, Inc. v. MumboJumbo, LLC, 350 S.W.3d 699, 713 (Tex. App. 2011)

(quoting Lesikar v. Rappeport, 33 S.W.3d 282, 305 (Tex. App. 2000)). See also Employees Ret.
Sys. of Texas v. Putnam, LLC, 294 S.W.3d 309, 316 n.7 (Tex. App. 2009) (observing that the
concept of “proximate cause” that is “applicable to consequential damages in a breach-of-
contract claim” requires that “such damages must be foreseeable and directly traceable to the
wrongful act and result from it” (citations and internal quotation marks omitted)).
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                                        No. 13-10519
in describing the law to the jurors,” 36 so long as the “instructions regarding
state substantive law [are] accurate.” 37 In this case, although the challenged
instruction likely should have been rendered clearer and more explicit for the
ordinary juror, the instruction was nonetheless correct. 38                      Accordingly,
Hellmann has failed to show “substantial and ineradicable doubt” as to
“whether the jury has been properly guided in its deliberations.” 39
        Second, and more importantly, Hellmann’s challenge also cannot
succeed because Hellmann has not shown that “the outcome of the case” was
affected by the district court’s failure to define consequential damages as
reasonably foreseeable. 40 The jury heard testimony from David Kang, one of
Hellmann’s branch managers, who admitted that, in his experience, “the
consequence” of a delay in a customer’s shipment is usually “[a]dditional
expenses and nonproductivity.            So additional costs.”        The jury also heard
testimony from John Russell, one of Hellmann’s regional sales managers,
regarding an e-mail notifying him at the very beginning of the transaction that
the content of the shipment included “[h]ydraulic presses from Mexico.” The

       36  See Jimenez, 660 F.3d at 845; United States v. Bernegger, 661 F.3d 232, 240-41 n.3
(5th Cir. 2011); United States v. Ortiz-Mendez, 634 F.3d 837, 839 (5th Cir. 2011).
        37 See Baker v. Canadian Nat’l/Illinois Cent. R.R., 536 F.3d 357, 365 (5th Cir. 2008);

Harrison v. Otis Elevator Co., 935 F.2d 714, 717 (5th Cir. 1991) (“No harmful error is
committed if the charge viewed as a whole correctly instructs the jury on the law, even though
a portion is technically imperfect . . . . The trial court has broad discretion to compose jury
instructions, as long as they are fundamentally accurate and not misleading.” (internal
citations and quotation marks omitted)).
        38 See Bernegger, 661 F.3d at 240-41 n.3 (finding no abuse of discretion where a district

court “fail[ed] to instruct the jury on the definition of ‘letter of intent’”); United States v.
Tucker, 345 F.3d 320, 335 (5th Cir. 2003) (concluding that a trial court is not obligated “to
define within the jury charge ‘willfully,’ as that term is referred to in [15 U.S.C. § 77x]”);
United States v. Loe, 248 F.3d 449, 459 (5th Cir. 2001) (“We have held that failure to charge
materiality to the jury requires reversal, without considering whether the error was
harmless. However, we have not found that failure to define materiality compels the same
response.”).
        39 See Price, 509 F.3d at 708 (quoting Thomas, 297 F.3d at 365).
        40 See id.

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                                     No. 13-10519
evidence before the jury therefore demonstrated that a loss of profits, which
would have “result[ed] naturally” 41 from Hellmann’s failure to deliver Eagle’s
industrial equipment, was foreseeable from the outset of the transaction.
      Moreover, Hellmann did not argue during either its opening statement
or closing argument that the damages resulting from the loss of this
machinery’s use were unforeseeable when the transaction was made. On the
contrary, Hellmann’s own attorney openly conceded before the jury during
closing argument that, “if you have to answer it,” then Eagle “proved up that
they had to buy replacement presses, and that cost money. They proved up the
window of time where there was no presses. They lost money, they proved
that.” Because even “a failure to instruct on an element is harmless when the
element is undisputed,” 42 a district court’s failure to provide a precise
definition for an undisputed element is therefore equally harmless. In this
case, Hellmann itself failed to draw any distinction between damages that
were reasonably foreseeable and damages that were not.                     Accordingly,
Hellmann cannot now argue that the lack of an explicit jury instruction
emphasizing this distinction “affected the outcome of the case.” 43 For these
reasons, Hellmann’s second challenge to the district court’s jury instructions
must be rejected.
                                           C.
      Finally, Hellmann argues that the district court erred by placing the
burden of proof on Hellmann to demonstrate “by a preponderance of the
evidence, that it complied with its fiduciary duties to Eagle . . . .” Even under
the abuse-of-discretion standard, this challenge must also be rejected.

      41 See Arthur Andersen, 945 S.W.2d at 816.
      42 See United States v. Reff, 479 F.3d 396, 402 (5th Cir. 2007).
      43 See Price, 509 F.3d at 708 (quoting Thomas, 297 F.3d at 365).

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                                       No. 13-10519
       As this court explained in Navigant Consulting, Inc. v. Wilkinson, 508
F.3d 277, 295 (5th Cir. 2007), “[u]nder Texas law, where a fiduciary engages in
a transaction with a party to whom the fiduciary owes duties, a presumption
of unfairness arises, and the burden is placed on the fiduciary to establish that
the transaction was fair.” This is confirmed by Texas Pattern Jury Charge
104.2, which provides that a fiduciary must “prove he complied with his duty”
wherever a fiduciary relationship of agency exists between parties to a
transaction.
       Here, the jury’s finding of an agency relationship was supported by the
evidence. The jury heard testimony from Mark Sola, Hellmann’s vice president
for customs compliance, that Hellmann regularly requests and receives a
written power of attorney from its customers that “allows Hellmann to act on
behalf of its customers with U.S. Customs.” David Kang, Hellmann’s branch
manager, also testified that freight forwarders ordinarily “act as an agent for
customers,” and that “Hellmann [wa]s an agent of Eagle” during the shipping
transaction. The jury therefore found, in response to a question on the verdict
form, that “Eagle proved, by a preponderance of the evidence, that a
relationship of trust and confidence existed between Eagle and Hellmann . . .
.” This was sufficient under Texas law, as explained in Navigant Consulting,
508 F.3d at 295, to shift the burden to Hellmann to demonstrate that it
complied with its fiduciary duties in any transactions with its principal. 44
       Hellmann argues, however, that before the district court can engage in
burden shifting, Texas law requires Eagle to prove that Hellmann “benefited”
from its transaction with Hellmann. In Hellmann’s view, this prerequisite is
not satisfied in the present case because “the evidence is that Hellmann lost

       44 See Amwest Sav. Ass’n v. Statewide Capital, Inc., 144 F.3d 885, 891 (5th Cir. 1998)
(“[F]iduciaries who engaged in ‘transactions’ with their principals were required to prove the
fairness of those transactions.”).
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                                      No. 13-10519
money in performing under its shipping agreement with Eagle, not that it
gained from it.” This argument, however, is unavailing. Initially, Hellmann’s
right to receive payment for its services constituted a benefit arising from the
shipping transaction, because “[a] promise” may constitute a valuable
consideration in Texas. 45       Moreover, the jury heard testimony from John
McConnell, Hellmann’s export manager, indicating that much of the
shipment’s delay resulted from Hellmann’s decisions to save itself money—
without notifying its principal—rather than pay additional costs for expedited
resolution of problems at the Mexican border. Whichever of these two aspects
of the transaction is taken into consideration, therefore, it is evident that
Hellmann did benefit from its transaction with Eagle.
       Accordingly, based on the testimony regarding Hellmann’s transaction
with its principal, Eagle, the district court properly instructed the jury to shift
the burden of proof in accordance with Texas law. 46
                                            IV.
       For the reasons set forth above, we conclude that the district court’s
application of Rule 411 of the Federal Rules of Evidence did not constitute an
abuse of discretion. We also conclude that the district court’s decision to
instruct the jury based on Texas law was not plain error. Finally, we conclude
that the district court’s explanation of the Texas law governing foreseeability
of consequential damages and the burden to show breach of fiduciary duty did
not constitute abuse of discretion.
       We therefore AFFIRM the judgment of the district court.
       AFFIRMED.

       45 See Robert L. Crill, Inc. v. Bond, 76 S.W.3d 411, 418 (Tex. App. 2001); Copeland v.
Alsobrook, 3 S.W.3d 598, 606 (Tex. App. 1999).
       46 Navigant Consulting, 508 F.3d at 295.

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