When “Applicable Law” Isn’t Enough: Fifth Circuit Clarifies the Limits of State Law in Federal Enclaves – A Commentary on Vinales v. AETC II

Introduction

Vinales v. AETC II, No. 24-50113 (5th Cir. 2025), tackles a recurring but often misunderstood question: How far does state law reach inside property over which the United States holds exclusive jurisdiction – a “federal enclave”? The dispute arose after Lt. Col. Shane Vinales and his family sued the private entities managing military housing at Randolph Air Force Base, alleging a host of Texas-law claims tied to mold, asbestos and other defects in their on-base residence.

The district court, acting through a magistrate by consent, held almost all of the family’s state-law causes of action barred by the federal enclave doctrine, allowed a single breach-of-contract count to proceed, and ultimately awarded roughly $92,000 in damages but no attorneys’ fees. Both sides appealed. In a per curiam opinion, the Fifth Circuit affirmed across the board.

Although the court resolved many subsidiary issues – fraud pleading, evidence exclusion, jury instructions – the heart of the opinion is its reaffirmation and refinement of enclave law. Most notably, the panel declared that boiler-plate promises to follow “all applicable federal, state and local laws” in a lease do not incorporate contemporary state statutes or waive federal supremacy on an enclave. This commentary unpacks that holding, the precedents relied on, and the likely ripple effects for military-housing litigation and for any contracts executed wholly within federal enclaves.

Summary of the Judgment

Federal Enclave Doctrine Applied: All claims were governed by federal law plus Texas law as it existed in 1951 (the year Texas ceded jurisdiction). Modern Texas causes of action or remedies – Deceptive Trade Practices Act (DTPA), exemplary damages, fee-shifting statutes – were unavailable.
Fraud Claim Dismissed: Plaintiffs identified no actionable misrepresentation; alleged statements were either puffery, opinions or not shown to be false when made.
Trial & Verdict: Jury awarded $31,654 (diminution in rental value) and $60,000 (personal-property loss) on the surviving breach-of-contract claim. Evidence exclusions and jury instructions were upheld.
Attorneys’ Fees Denied: Article 2226 (1949) did not permit fees against limited-liability companies, and plaintiffs violated local confer-and-certify rules.
Cross-Appeal Defeated: The housing provider’s challenges to damages, waiver, exclusive-remedy language, and sufficiency of evidence all failed.

Analysis

1. Precedents Cited and Their Influence

The panel anchors its analysis in a line of Supreme Court and Fifth Circuit cases delineating enclave law:

Parker Drilling Mgmt. Servs., Ltd. v. Newton, 587 U.S. 601 (2019) – Modern lodestar reiterating that only state law in force at the time of cession continues as “federalized state law.”
James Stewart & Co. v. Sadrakula, 309 U.S. 94 (1940) – First articulation that post-cession state statutes are generally inapplicable absent congressional adoption.
Paul v. United States, 371 U.S. 245 (1963) – Clarified that even preserved state law must not conflict with federal objectives.
Howard v. Commissioners of the Sinking Fund, 344 U.S. 624 (1953) – Plaintiffs cited it for a broader state-law reach; the panel follows Mississippi River Fuel Corp. v. Cocreham, 382 F.2d 929 (5th Cir. 1967), in rejecting that reading.

Together these authorities frame a two-step inquiry: (1) Was the contested state rule in effect at cession? (2) Even if so, does it conflict with federal policy? The Fifth Circuit applies that framework mechanistically, illustrating its continued vitality eighty years after Sadrakula.

2. Legal Reasoning of the Court

Choice-of-Law vs. Federal Supremacy
Contractual language obliging the private landlord to follow “all applicable laws” did not constitute an affirmative choice-of-law clause. Nor did cross-references to county building codes trump constitutional supremacy at Randolph AFB, expressly noted in the master lease. The panel aligned with other enclave cases (JAAAT Tech. Servs. v. Tetra Tech Tesoro, E.D.Va. 2017) holding that generic references are insufficient to displace enclave doctrine.
Statutory Personal-Injury Exception Rejected
28 U.S.C. § 5001(b) makes state law applicable for “personal injury” in enclaves. Because Texas DTPA provides only economic, not bodily-injury relief, plaintiffs could not wedge their consumer-protection claim into the exception. The opinion thereby narrows § 5001(b) to physical-injury torts, not statutory economic claims.
Fraud Analysis
The court combed each alleged misstatement against the elements of pre-1951 common-law fraud, finding puffery, opinion, or lack of proof of falsity at the time made. This evidentiary dissection underscores the difficulty of pleading fraud under enclave-preserved law that predates modern consumer statutes.
Attorneys’ Fees and Entity Status
Article 2226 (1949) allowed fees only against “persons” and “corporations.” Limited-liability companies (created by Texas in 1991) were unknown in 1951, so the statute could not reach them within the enclave. The panel’s approach resurrects obsolete statutory vocabularies when applying pre-cession law, a point future litigants must heed.

3. Anticipated Impact

Military Housing Litigation: Plaintiffs nationwide have invoked modern state consumer statutes (e.g., Texas DTPA, California CLRA) against privatized military-housing managers. Vinales indicates that, in exclusive-jurisdiction bases, those creative theories will be summarily barred unless Congress acts.
Drafting Contracts on Enclaves: Parties can no longer assume that “comply with all applicable laws” will import current state codes. Clear, express choice-of-law clauses naming a jurisdiction and stating an intent to override enclave default may be required—if courts permit any contractual abrogation at all.
Scope of § 5001(b): By confining the exception to physical-injury torts, the Fifth Circuit shuts the door on piggy-backing economic or consumer-protection claims onto that statute.
Attorneys’ Fees Recovery: Counsel contemplating fee-shifting within enclaves must verify whether the defendant’s organizational form existed at cession or whether federal statutes supply an alternative basis.

Complex Concepts Simplified

Federal Enclave: Land within a state over which the federal government holds exclusive legislative jurisdiction, typically acquired by consent of the state legislature (Art. I § 8 cl. 17).
Federal Enclave Doctrine: Only state law existing at the moment of cession continues as “federalized” surrogate law. Later state statutes or common-law developments are inapplicable unless Congress adopts them or no federal interest is impaired (rare).
Pre-Cession vs. Post-Cession Law: Pre-cession refers to law in effect at the time the state ceded jurisdiction (here, 1951). Post-cession law is everything the state did afterward.
Choice-of-Law Clause: A contract provision expressly selecting which jurisdiction’s substantive law will govern disputes. Mere promises to follow “applicable laws” are not true choice-of-law clauses.
Diminution in Rental Value: Measure of damages equal to the difference between the rent paid and the fair rental value of the premises as actually delivered. In modern parlance, “benefit-of-the-bargain” damages for leases.

Conclusion

Vinales v. AETC II offers a modern illustration of an old constitutional principle: federal supremacy on enclaves is tenacious, and contract drafters must speak clearly if they hope to invite state law into such territory. By refusing to treat generic “applicable law” language as a waiver, the Fifth Circuit cements a bright-line rule that will streamline (and likely truncate) future state-law claims arising on military bases and other federal enclaves within the circuit. The decision also reminds practitioners that enclave cases often require researching statutory versions frozen decades in the past, assessing whether corporate forms existed at the time, and crafting litigation theories within that antique legal landscape.

For service-member tenants and privatized military-housing providers alike, Vinales signals that any substantial overhaul of rights and remedies on enclaves must come from Congress, not the courts, and certainly not from casual contractual references to “applicable law.”