Appellate Forfeiture of New Policy-Ambiguity Arguments After Contrary District-Court Positions

Case: Megalomedia v. Philadelphia Indemnity Insurance Company (5th Cir. Sept. 14, 2026)
Panel: Ho, Duncan, and Oldham, JJ. (Duncan, J., majority; Ho, J., concurring; Oldham, J., dissenting)
Governing law: Texas insurance/contract and fraud law (diversity jurisdiction)

I. Introduction

Megalomedia, an Austin-based television production company, produced My 600-lb Life. When participants (or their families) sued Megalomedia in Texas state court alleging injuries arising from production of the program (the consolidated “Bonner suit,” Karen Sue Bonner et al. v. Megalomedia, Inc. et al.), Megalomedia sought a defense and indemnity from its long-time insurer, Philadelphia Indemnity Insurance Company.

Philadelphia denied any duty to defend or indemnify under a general liability policy endorsement that “Excludes any/all reality shows” for Coverage A bodily injury/property damage claims. Litigation followed in federal court: Philadelphia sued for a declaratory judgment of no duty; Megalomedia counterclaimed for breach of contract, fraudulent inducement, and statutory causes under the Texas Insurance Code and the Deceptive Trade Practices Act (DTPA).

The appeal presented two practical questions: (1) whether Megalomedia could newly argue on appeal that “reality shows” is an ambiguous term such that the exclusion must be construed in its favor; and (2) whether Megalomedia could overturn the district court’s post-bench-trial rejection of fraud and reliance-based statutory claims.

II. Summary of the Opinion

The Fifth Circuit affirmed across the board. It held that Megalomedia’s newly minted appellate argument—“reality shows” is ambiguous and therefore My 600-lb Life might not be a “reality show”—was forfeited because it was not raised in the district court. Indeed, the court stressed that Megalomedia had taken the opposite position below, repeatedly characterizing My 600-lb Life as a reality show while advancing a different interpretive theory of the exclusion.

The court also affirmed the district court’s bench-trial findings rejecting fraudulent inducement and related statutory claims because Megalomedia failed to show clear error in the finding that it could not have justifiably relied on any supposed misrepresentation about coverage given its knowledge of the exclusion and its course of dealing acknowledging reality-show noncoverage.

III. Summary of the Court’s Decision

A. Coverage / duty-to-defend phase (summary judgment)

• The district court applied Texas’s “eight-corners rule” and held the policy’s “reality show” exclusion barred Coverage A defense for bodily injury claims arising from producing My 600-lb Life.
• On appeal, Megalomedia tried to reframe the dispute as “What is a ‘reality show’?” and argued ambiguity should be construed against Philadelphia.
• The Fifth Circuit refused to reach that merits question because the ambiguity argument was not raised in opposition to summary judgment and thus was forfeited.

B. Counterclaims phase (bench trial)

• The district court found no actionable misrepresentation and, in any event, no justifiable reliance—fatal to fraudulent inducement.
• Because reliance is also required for the Texas Insurance Code and DTPA theories, those claims failed as well.
• The Fifth Circuit affirmed, deferring to the trial court’s fact findings under clear-error review.

IV. Analysis

A. Precedents Cited

1. Texas duty-to-defend and policy interpretation framework

• Pine Oak Builders, Inc. v. Great Am. Lloyds Ins., 279 S.W.3d 650, 654 (Tex. 2009): The court cited Pine Oak Builders for the eight-corners rule—duty to defend is determined by comparing only the policy and the live pleadings. This contextualizes why summary judgment was appropriate as a matter of law once the exclusion was read as applying to the pleaded “bodily injury” allegations.
• Nassar v. Liberty Mut. Fire Ins. Co., 508 S.W.3d 254, 258 (Tex. 2017): Megalomedia invoked Nassar for the pro-insured rule that ambiguities are construed in favor of coverage. The Fifth Circuit did not reject that rule; it held Megalomedia forfeited the argument that would have triggered it.

2. Federal appellate preservation / forfeiture doctrine (core of the decision)

• Rollins v. Home Depot USA, 8 F.4th 393, 397 (5th Cir. 2021) and Keelan v. Majesco Software, Inc., 407 F.3d 332, 339 (5th Cir. 2005): These cases supply the rule applied here: a party forfeits an argument by failing to raise it in the district court in response to summary judgment, and it may not be raised for the first time on appeal.
• Biziko v. Van Horne, 981 F.3d 418, 420 (5th Cir. 2020): Used for the additional proposition that an appellant cannot deny on appeal what it previously asserted below; shifting positions can trigger forfeiture in the Fifth Circuit’s appellate practice.
• Little v. Liquid Air Corp., 37 F.3d 1069 (5th Cir. 1994) (en banc): Megalomedia tried to leverage Little to say summary judgment must be denied if the movant fails its burden “regardless of the nonmovant’s response.” The court rejected this as a misread: Little addresses burdens, not whether an appellant can resurrect a legal argument never presented below.
• The majority buttressed its forfeiture holding with additional Fifth Circuit authority cited in footnote discussion (e.g., Diamond Servs. Corp. v. RLB Contracting, Inc.; Ibanez v. Tex. A&M Univ. Kingsville; Crown Castle Fiber, L.L.C. v. City of Pasadena) illustrating a consistent line: issues not raised at summary judgment are not considered on appeal.

3. Party presentation principle (invoked against the dissent)

• United States v. Sineneng-Smith, 590 U.S. 371 (2020) and Greenlaw v. United States, 554 U.S. 237, 243 (2008): The majority used these to frame party presentation as a norm of adversarial litigation: courts generally decide what parties present; litigants must advance arguments in a timely way.
• Margolin v. Nat'l Ass'n of Immigr. Judges, 146 S. Ct. 1285, 1288 (2026) and Clark v. Sweeney, 607 U.S. 7, 9 (2025): Cited for the Supreme Court’s modern reiteration that points not argued generally will not be considered; the majority treated these as reinforcing its refusal to entertain a forfeited ambiguity theory.

4. Standards of review and Erie choice-of-law structure

• In re La. Crawfish Producers, 852 F.3d 456, 462 (5th Cir. 2017) (summary judgment de novo).
• Luwisch v. Am. Marine Corp., 956 F.3d 320, 326 (5th Cir. 2020) (bench-trial findings clear error; legal conclusions de novo).
• Coleman E. Adler & Sons, L.L.C. v. Axis Surplus Ins. Co., 49 F.4th 894, 897 (5th Cir. 2022) and Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938) (Texas law governs in diversity).

5. Texas fraud, justifiable reliance, and reliance-based statutory claims

• Mercedes-Benz USA, LLC v. Carduco, Inc., 583 S.W.3d 553, 558 (Tex. 2019): Cited for the proposition that falsity and justifiable reliance are fact questions, reinforcing deference to the district court’s trial findings.
• JPMorgan Chase Bank, N.A. v. Orca Assets G.P., L.L.C., 546 S.W.3d 648, 653 (Tex. 2018): Listed the elements of Texas fraud, including justifiable reliance—central to why Megalomedia’s fraud theory failed even if a misrepresentation could be hypothesized.
• Zorrilla v. Aypco Constr. II, LLC, 469 S.W.3d 143, 153 (Tex. 2015) and Haase v. Glazner, 62 S.W.3d 795, 798 (Tex. 2001): Cited for fraudulent inducement as a species of fraud involving promises of future performance made without intent to perform.
• USAA Tex. Lloyds Co. v. Menchaca, 545 S.W.3d 479, 497 (Tex. 2018) and Rich v. Olah, 274 S.W.3d 878, 887-88 (Tex. App.—Dall. 2008, no pet.): Used to dispose of Texas Insurance Code and DTPA theories because “reliance” is required, and reliance was negated by Megalomedia’s knowledge and conduct.

B. Legal Reasoning

1. The court’s central move: characterize the appeal as procedural, not semantic

The majority reframed the dispute away from defining “reality show” and toward issue preservation. The key factual predicate was not disputed: Megalomedia’s filings below repeatedly called My 600-lb Life a “reality show.” Its only summary-judgment interpretive theory was that the endorsement’s syntax somehow “excluded” reality shows from the exclusion (thus covering them). Having lost that reading, Megalomedia attempted a new theory on appeal: the label “reality show” is itself indeterminate, so the exclusion is ambiguous and must be construed in its favor.

The court treated this as the paradigmatic forfeiture scenario—raising a distinct legal argument for the first time on appeal, and doing so in a way that contradicts a key characterization repeatedly made to the district court.

2. Why forfeiture applied with special force here

• Non-presentation: Megalomedia conceded at oral argument that the ambiguity-as-genre-indeterminacy argument “was not made below.” That concession aligned the case squarely with Rollins v. Home Depot USA and Keelan v. Majesco Software, Inc..
• Affirmative contrary position: The court emphasized that Megalomedia did not merely omit the argument; it embraced the opposite premise (that My 600-lb Life is a reality show), prompting application of Biziko v. Van Horne-style forfeiture where an appellant attempts to deny its earlier interpretive framing.
• Institutional logic: The majority tied forfeiture to party presentation norms: allowing a litigant to “pirouette 180 degrees” would undermine the adversarial system, encourage strategic withholding, and waste trial-court and appellate resources.

3. Fraud and reliance: knowledge defeats justifiable reliance

The bench-trial affirmance is best understood as a straightforward application of reliance doctrine under deferential review. The district court found extensive evidence that Megalomedia knew “reality TV” was excluded from Coverage A and acted consistently with that understanding: communications acknowledging reality exclusion; production-cost reporting that removed reality-show costs; procurement of separate coverage for reality programs; and representations to other insurers that My 600-lb Life was a “reality show.” Given that evidentiary record, the Fifth Circuit held Megalomedia could not show clear error in the district court’s finding that any alleged contrary representation could not have been justifiably relied upon.

4. The dissent’s theory—and why the majority refused it

Judge Oldham’s dissent would have reached the merits and found “reality show” ambiguous, emphasizing Supreme Court statements (notably Kamen v. Kemper Fin. Servs., Inc. and Yee v. City of Escondido) that courts may apply the correct law even if parties’ theories are imperfect, and that parties may raise new “arguments” supporting an existing “claim.”

The majority responded that whatever the outer limits of party presentation, this was beyond them: Megalomedia sought to win by swapping in a new ambiguity theory that the district court never had a chance to consider, after repeatedly asserting the opposite characterization below. The majority thus treated the dissent’s claims/arguments distinction as inconsistent with Fifth Circuit forfeiture doctrine and with the practical demands of adversarial litigation.

C. Impact

1. Appellate practice in the Fifth Circuit

• Preservation is outcome-determinative: The decision reinforces that policyholder-side (and insurer-side) litigants must raise their best ambiguity and alternative-construction theories at summary judgment, not hold them in reserve for appeal.
• Contra-position risk: Repeated factual characterizations in district-court briefing can function as anchors; attempting to reverse them on appeal invites forfeiture (and potentially judicial estoppel in other contexts, though the court did not base the holding on estoppel).
• Panel signals restraint: The court emphasized it was not announcing a substantive definition of “reality show.” The “precedent” is procedural: how appellate courts police new interpretive theories and litigation about-turns.

2. Insurance coverage litigation under Texas law (practical effects)

• Eight-corners disputes still hinge on pleadings and policy text: The case illustrates how exclusions—if properly presented—can be dispositive at summary judgment in duty-to-defend litigation.
• Course-of-dealing evidence matters for extra-contractual claims: Even when coverage is denied, insured communications acknowledging exclusions can defeat reliance elements for fraudulent inducement, Texas Insurance Code § 541.151 claims, and DTPA claims.
• Genre/industry-label disputes must be litigated early: If an insured intends to argue that a program does not fall within an exclusion label (e.g., “reality show”), it must build that record and argument in the trial court.

V. Complex Concepts Simplified

• Eight-corners rule: A Texas duty-to-defend rule: courts compare only (1) the insurance policy and (2) the plaintiff’s petition/complaint—no outside evidence—to decide whether the insurer must defend.
• Forfeiture vs. waiver: Forfeiture is failing to raise an argument in time; waiver is intentionally giving it up. The court treated Megalomedia’s new ambiguity theory as forfeited (not timely raised) and aggravated by prior contrary positions.
• Ambiguity in insurance: If policy language is reasonably susceptible to more than one meaning, Texas courts generally construe it in the insured’s favor. But that interpretive rule is triggered only if the argument is properly preserved and developed in the trial court.
• Justifiable reliance: A required element of fraud and many consumer-protection claims. If the plaintiff knew the truth (or the written contract unambiguously disclosed it), reliance on contrary statements is often not “justifiable.”
• Standards of review: “De novo” means the appellate court re-decides legal issues; “clear error” means factual findings stand unless implausible in light of the entire record.
• Party presentation principle: Courts generally decide issues the parties present; the majority used it to justify refusing a late-breaking appellate theory, while the dissent invoked it to argue courts may apply correct law despite parties’ imperfect theories.

VI. Conclusion

The Fifth Circuit’s decision is less a ruling about what counts as a “reality show” than a firm statement about appellate discipline: litigants must present their interpretive theories in the district court, and they cannot reverse key premises on appeal to obtain a second bite at the apple. On the extra-contractual side, the court’s affirmance underscores a recurring Texas-law theme—knowledge and course of dealing can be fatal to justifiable reliance, collapsing fraud, Texas Insurance Code, and DTPA theories together when the insured’s own conduct shows it understood the exclusion.