Date: Feb 4, 2026

Dentons v. Stairway Legacy Assets: Inadequate Appellate Briefing Forfeits Third-Party-Beneficiary Claims to Settlement Proceeds

Introduction

In Dentons US L.L.P.; Wilson, Robertson & VanDeventer P.C. v. Stairway Legacy Assets, L.P.; Ironshore Specialty Insurance Company, the Fifth Circuit reviewed a district court’s resolution of competing claims to patent-litigation settlement proceeds deposited in the registry of the Eastern District of Texas. The appellants (Dentons US L.L.P. and Wilson, Robertson & VanDeventer, P.C., together “Law Firms”) had served as Eidos’s counsel in underlying ALPS patent litigation and sought to recover fees and costs from what they characterized as LG’s contractual share of the proceeds under a 2008 patent purchase agreement (the “ALPS Agreement”).

The appellees, Stairway Legacy Assets, L.P. (“Stairway”) and Ironshore Specialty Insurance Company (“Ironshore”), asserted priority rights arising from a 2010 financing arrangement (the “Loan Agreement”) and an associated contingent loss reimbursement policy (the “Policy”), the latter of which had been arbitrated to a detailed award (the “Award”) that was later affirmed in New York state-court proceedings.

The appeal distilled to whether Dentons could prevent LG’s settlement-based release of its own rights to the settlement proceeds by claiming Dentons held independent rights as a third-party beneficiary of the ALPS Agreement governed by Delaware law. The Fifth Circuit affirmed, holding that the Law Firms forfeited the third-party-beneficiary theory through inadequate briefing and that, in any event, the record and contract language did not demonstrate third-party-beneficiary status under Delaware’s test.

Summary of the Opinion

Jurisdiction: The Fifth Circuit held it had appellate jurisdiction under 28 U.S.C. § 1291 even though the district court did not enter a separate final judgment, because the summary-judgment order used “definite language” and was intended to be immediately effective (citing Ueckert v. Guerra and Williams v. Seidenbach).
Interpleader: The district court properly exercised statutory interpleader jurisdiction under 28 U.S.C. § 1335(a).
Merits focus: Although multiple theories were raised (res judicata, collateral estoppel, attorney’s lien, common fund), the panel treated the appeal as turning on a single practical question: whether Dentons was a third-party beneficiary of the ALPS Agreement such that LG could not release rights affecting Dentons’s claimed recovery.
Holding: The Law Firms forfeited their third-party-beneficiary argument by failing to adequately brief it with record citations and pertinent authority (citing Rollins v. Home Depot USA, Procter & Gamble Co. v. Amway Corp., and Carl E. Woodward, L.L.C. v. Acceptance Indem. Ins. Co.).
Alternative merits ruling: Even absent forfeiture, Dentons failed to satisfy Delaware’s third-party-beneficiary requirements (citing Bako Pathology LP v. Bakotic; also discussing Greater N.Y. Mut. Ins. Co. v. Travelers Ins. Co., Delmar News, Inc. v. Jacobs Oil Co., and Willis v. City of Rehoboth Beach).

Analysis

Precedents Cited

1) Appellate jurisdiction and finality without a separate judgment

Ueckert v. Guerra, 38 F.4th 446 (5th Cir. 2022): The panel relied on this decision for the principle that an order may be “final” for § 1291 purposes where it uses “definite language” and the district court intended it to take effect immediately, even if no separate judgment is entered. This allowed the Fifth Circuit to reach the merits rather than remand for entry of a formal judgment.
Williams v. Seidenbach, 958 F.3d 341 (5th Cir. 2020) (en banc): Cited to reinforce that finality exists where the district court has decided all live claims against all parties and the decision is “plainly final,” supporting appellate jurisdiction in a procedurally untidy posture.

2) Statutory interpleader jurisdiction

Auto Parts Mfg. Miss., Inc. v. King Constr. of Hou., L.L.C., 782 F.3d 186 (5th Cir. 2015): Used to explain that interpleader jurisdiction is assessed at the time of filing and is not defeated by later developments.
Walker v. Pritzker, 705 F.2d 942 (7th Cir. 1983): Quoted (via Auto Parts Mfg. Miss.) for the proposition that subsequent events do not divest interpleader jurisdiction once properly acquired.

3) Standards for summary judgment review

Oreck Direct, LLC v. Dyson, Inc., 560 F.3d 398 (5th Cir. 2009): Cited for de novo review of summary judgment.
Fed. R. Civ. P. 56(a): The governing standard—no genuine dispute of material fact and entitlement to judgment as a matter of law.

4) Forfeiture/waiver by inadequate briefing

Rollins v. Home Depot USA, 8 F.4th 393 (5th Cir. 2021): The panel treated this as the central articulation of forfeiture by inadequate appellate briefing, including failure to provide supporting argument, authority, and record citations.
Fed. R. App. P. 28(a)(8)(A): Invoked alongside Rollins as the rule requiring developed argument with citations.
Procter & Gamble Co. v. Amway Corp., 376 F.3d 496 (5th Cir. 2004): Cited for the general rule that arguments not properly raised in the opening brief are forfeited and cannot be salvaged in reply.
Carl E. Woodward, L.L.C. v. Acceptance Indem. Ins. Co., 743 F.3d 91 (5th Cir. 2014): Used to illustrate that “random and unfocused references” unsupported by record or relevant caselaw are insufficient and constitute waiver/forfeiture.
United States v. Stalnaker, 571 F.3d 428 (5th Cir. 2009): Reinforced that “laundry list” assertions without full explanation and legal/record support are waived.
Indigenous Peoples of Coastal Bend v. U.S. Army Corps of Eng'rs, 132 F.4th 872 (5th Cir. 2025): Cited to clarify the conceptual distinction between “waiver” and “forfeiture,” with forfeiture being the operative concept in this case.

5) Choice of law and Delaware third-party-beneficiary doctrine

Al Rushaid v. Nat'l Oilwell Varco, Inc., 757 F.3d 416 (5th Cir. 2014): Cited to support enforcing the ALPS Agreement’s Delaware choice-of-law clause and applying Delaware law to interpret the contract.
Bako Pathology LP v. Bakotic, 288 A.3d 252 (Del. 2022): Supplied the three-part Delaware test for third-party-beneficiary status: (i) intent to benefit the third party; (ii) benefit intended as a gift or satisfaction of a pre-existing obligation; and (iii) the intent to benefit is a material part of the contracting parties’ purpose.
Greater N.Y. Mut. Ins. Co. v. Travelers Ins. Co., No. 10-cv-01107, 2011 WL 4501207 (D. Del. Sept. 28, 2011): Used for the pleading/identification concept—an asserted beneficiary should be named/identified in the contract or facts must reasonably support an inference of intended beneficiary status.
Delmar News, Inc. v. Jacobs Oil Co., 584 A.2d 531 (Del. Super. Ct. 1990): Cited (via Greater N.Y. Mut. Ins. Co.) as authority for the “named or identified”/reasonable inference approach.
Willis v. City of Rehoboth Beach, C.A. No. 03C-11-016, 2004 WL 2419143 (Del. Super. Ct. Oct. 14, 2004): Cited for the interpretive principle that courts look to the contract language to determine intent.
Crispo v. Musk, 304 A.3d 567 (Del. Ch. 2023): Cited by the Law Firms for general third-party-beneficiary propositions, including limits on modifying vested beneficiary rights without consent; the Fifth Circuit found the Law Firms failed to develop this into a record- and doctrine-grounded showing of vesting in this contract.

Legal Reasoning

1) Issue narrowing: from seven appellate points to one dispositive question

Although the Law Firms listed seven arguments (res judicata, collateral estoppel, LG’s inability to release, privity, no rights to LG’s share, attorney’s lien, and common fund), the panel credited the Law Firms’ own concession in reply that the dispute “comes down” to whether LG had an interest and whether Dentons was a third-party beneficiary. Because LG had in fact released whatever interest it might have had, the panel treated the case as turning on a single practical question: whether Dentons had an independent, non-derivative contractual claim against LG’s share as a third-party beneficiary of the ALPS Agreement.

2) Forfeiture as the primary holding

The court’s decisive move was procedural: it held the Law Firms forfeited the third-party-beneficiary theory by failing to meet Fifth Circuit briefing norms (Fed. R. App. P. 28(a)(8)(A)). The deficiencies were concrete and repeated:

Conclusory assertions without record support: e.g., stating the ALPS Agreement was “designed” to benefit counsel but providing no citation to the agreement or contemporaneous evidence.
Failure to cite the contract text in the argument section: notably, no meaningful engagement with the ALPS Agreement’s language, notwithstanding that contract language is the centerpiece of Delaware intent analysis.
Overreliance on partner declarations and a non-matching prior decision: the cited Southern District of New York opinion appeared (even on the Law Firms’ own telling) to address third-party-beneficiary status under the Policy, not under the ALPS Agreement—yet the Law Firms did not “bridge the gap.”
Generic legal propositions without analogous applications: the Law Firms cited Delaware decisions for general rules but did not provide case law applying those rules in a comparable contractual setting (especially attorney-fee recovery theories premised on a revenue-sharing definition).

Under Rollins v. Home Depot USA, Carl E. Woodward, L.L.C. v. Acceptance Indem. Ins. Co., and United States v. Stalnaker, this kind of underdeveloped briefing is not merely weak—it is treated as forfeiture, ending the appeal without the court having to resolve the substantive contract question.

3) Alternative merits analysis: Dentons still failed Delaware’s test

The panel nonetheless explained that, even if not forfeited, the claim would fail under Delaware law. Applying the ALPS Agreement’s Delaware choice-of-law clause (supported by Al Rushaid v. Nat'l Oilwell Varco, Inc.), the court cited Bako Pathology LP v. Bakotic for the three elements of third-party beneficiary status, emphasizing intent and materiality.

The contract problem for Dentons was straightforward: the ALPS Agreement did not identify McKenna/Dentons, and the “Net Revenues” definition—allowing deduction of “attorneys’ fees, expenses (including expert fees), and costs”—did not itself show that LG and Eidos intended to confer enforceable rights on counsel. Under Greater N.Y. Mut. Ins. Co. v. Travelers Ins. Co. (citing Delmar News, Inc. v. Jacobs Oil Co.), absent being named or otherwise identified, a claimant must show facts supporting a reasonable inference of intended beneficiary status; the Law Firms did not supply such facts. Consistent with Willis v. City of Rehoboth Beach, the panel stressed that intent must be found in the contract language and properly supported record facts—not in counsel’s post hoc assertions.

The court also underscored Delaware’s requirement that the intent to benefit the third party be a material part of the contracting parties’ purpose, pointing out that the record did not show the ALPS transaction’s core purpose included conferring enforceable rights on Eidos’s counsel.

Impact

Procedural lesson with substantive bite: Even in high-stakes fund-distribution disputes, the Fifth Circuit will dispose of a case on forfeiture grounds where briefing lacks (i) contract citations, (ii) record citations, and (iii) context-specific authority. This is particularly consequential in interpleader/post-judgment distribution settings, where a single theory may be dispositive of entitlement to a fund.
Third-party-beneficiary claims by attorneys face a high bar: The decision signals skepticism that generic “net revenues” or “fees deducted” clauses imply intent to give counsel enforceable rights against a counterparty; counsel seeking protection should prefer explicit contractual language (e.g., payment directives, express beneficiary clauses, or acknowledgment of counsel’s entitlement).
Release dynamics: Where an upstream party (here, LG) releases its own rights to proceeds, downstream claimants cannot rely on that party’s former entitlement unless they can show an independent legal hook (assignment, lien recognized under governing law, or clearly established beneficiary status).
Unpublished but practical: Although “not designated for publication,” the opinion provides a clear roadmap for how the Fifth Circuit applies its briefing-forfeiture doctrine and how it expects Delaware third-party-beneficiary arguments to be presented and supported.

Complex Concepts Simplified

Interpleader (28 U.S.C. § 1335(a)): A procedure letting a stakeholder (often a court registry holding money) force competing claimants to litigate entitlement in one case, preventing multiple lawsuits over the same fund.
Forfeiture vs. waiver: Forfeiture is the loss of an argument because it was not properly presented (e.g., inadequate briefing); waiver is the intentional relinquishment of an argument. The court treated the Law Firms’ failure as forfeiture (citing Indigenous Peoples of Coastal Bend v. U.S. Army Corps of Eng'rs).
Third-party beneficiary: A non-signatory who can enforce a contract if the signatories intended to benefit the non-signatory in a way that is material to the contract’s purpose. Under Delaware law (per Bako Pathology LP v. Bakotic), intent and materiality are essential; incidental benefits are not enough.
Res judicata / collateral estoppel: Doctrines that can bar re-litigation of claims (res judicata) or issues (collateral estoppel) already decided in prior proceedings. The panel noted it agreed with the district court on res judicata but resolved the appeal on forfeiture/merits grounds tied to the third-party-beneficiary theory.
Finality for appeal (28 U.S.C. § 1291): An order can be appealable even without a separate “final judgment” document if it clearly resolves the remaining issues and is intended to take effect immediately (as discussed via Ueckert v. Guerra and Williams v. Seidenbach).

Conclusion

The Fifth Circuit’s affirmance rests on a sharpened and practice-critical rule: when a party’s opening brief fails to connect the record, the contract text, and context-specific authority, the court will treat the argument as forfeited (anchored in Rollins v. Home Depot USA and related cases). Substantively, the court also signaled that Delaware third-party-beneficiary status will not be inferred from generalized fee-deduction language like the ALPS Agreement’s “Net Revenues” definition without clear indicia that benefitting counsel was a material purpose of the contracting parties.