“Applicable Law” Is Not Enough: Fifth Circuit Re-Affirms the Strict Federal-Enclave Rule in Vinales v. AETC II

1. Introduction

In Vinales v. AETC II Privatized Housing, L.L.C., No. 24-50113 (5th Cir. June 27 2025), the United States Court of Appeals for the Fifth Circuit delivered a sweeping opinion that clarifies how the federal-enclave doctrine interacts with (i) modern consumer-protection statutes, (ii) contractual references to state “applicable law,” and (iii) post-cession remedies such as Texas attorney-fee statutes.

Lieutenant Colonel Shane Vinales, his wife Becky, and their children (“the Vinales family”) sued a group of private contractors that manage military housing at Randolph Air Force Base near San Antonio, Texas. They alleged numerous state-law claims—breach of the Texas Deceptive Trade Practices Act (DTPA), common-law fraud, breach of contract, and requests for exemplary damages and attorney fees—arising from mold, asbestos, and general dilapidation in their on-base residence. The district court (a consent magistrate judge) granted summary judgment on most claims, allowed the contract claim to reach a jury, and ultimately awarded the family roughly $92,000 in damages but no attorney fees. Both sides appealed.

The Fifth Circuit affirmed in full. Most significantly, it held that:

• the federal-enclave doctrine bars application of post-cession Texas statutes—including the DTPA and Texas attorney-fee provisions—even when a lease mentions “state and local applicable laws,” and
• a limited-liability company is not a “corporation” for purposes of Texas’s 1949 Article 2226 fee-shifting statute, which was the only potentially surviving pre-cession state remedy.

2. Summary of the Judgment

1. Federal Enclave Doctrine: Because Randolph AFB became a federal enclave in 1951, only federal law and pre-1951 state law survive unless Congress says otherwise. All post-cession Texas causes of action and remedies (DTPA, exemplary-damage provisions, contemporary attorney-fee statutes) were dismissed.
2. Fraud Claim: The plaintiffs supplied no actionable misrepresentation; website puffery and vague move-in comments were not enough. Summary judgment affirmed.
3. Trial Rulings: Exclusion of evidence about other tenants, pre-move-in conditions, and post-vacate remediation fell within Rule 403 and 406 discretion. No abuse of discretion.
4. Attorney Fees: Plaintiffs could not recover under Article 2226 because defendants are LLCs, not “corporations.” All other fee theories were post-cession and therefore barred.
5. Cross-Appeal Issues: The jury’s $60,000 personal-property award and $31,654 rental-diminution award survived sufficiency challenges; no error in jury instructions or damages theory.

3. Analysis

3.1 Precedents Cited & Their Influence

• Parker Drilling Mgmt. Servs. v. Newton, 587 U.S. 601 (2019) – Restated the three-step enclave framework: (1) pre-cession state law is “federalized,” (2) conflicting state law is ousted, and (3) new state law is presumed inapplicable. The Fifth Circuit used this template wholesale.
• James Stewart & Co. v. Sadrakula, 309 U.S. 94 (1940) – Earliest articulation that state law “freezes” at cession and can be updated only by Congress.
• Howard v. Comm’rs of the Sinking Fund of Louisville, 344 U.S. 624 (1953) – Plaintiffs leaned on “Howard” for a modern-state-law exception. The Fifth Circuit, relying on its own earlier decision in Mississippi River Fuel Corp. v. Cocreham, 382 F.2d 929 (5th Cir. 1967), rejected that broad reading and limited Howard to its tax facts.
• Paul v. United States, 371 U.S. 245 (1963) – Quoted for the “conflicts with federal policy” limitation.
• Prudential Ins. v. Jefferson Assocs., 896 S.W.2d 156 (Tex. 1995) & early 1900s Texas cases – Guided the court’s fraud/puffery analysis and the treatment of owner testimony on damages.

3.2 Court’s Legal Reasoning

1. Choice-of-Law Clauses Cannot “Unlock” Post-Cession State Law
     • The lease, resident guidelines, and the master development agreement used boilerplate phrases such as “comply with applicable state, federal, and local laws.” The Fifth Circuit held this language too generic to qualify as an affirmative contractual choice of Texas law that would override enclave supremacy.
     • Even if parties tried to do so expressly, the court hinted—but did not decide—that private contracts cannot waive the federal government’s exclusive legislative jurisdiction.
2. § 5001(b) “Personal Injury” Exception
     • 28 U.S.C. § 5001 allows state personal-injury law within enclaves. The plaintiffs framed DTPA claims as “personal injury.”
     • Texas courts, however, say the DTPA is not a personal-injury statute. Therefore, § 5001(b) did not rescue the claim.
3. Attorney Fees under Pre-1951 Texas Law
     • The only viable fee statute was Article 2226 (1949).
     • The Fifth Circuit applied ordinary-meaning canons circa 1951 and held that “corporation” excluded LLCs (which did not exist in Texas until the 1990s). Hence, no fees.
4. Damages & Sufficiency
     • For personal property and rent diminution, the court reconciled conflicting pre-cession Texas authorities on how specifically a plaintiff must value damages. It adopted a highly deferential stance to jury fact-finding because (a) any inconsistency in old Texas cases created legal ambiguity and (b) the federal Rule 50 standard demands “overwhelming” contrary evidence.

3.3 Potential Impact

• Step-Change for Military-Housing Litigation: Lessees on federal bases often invoke modern state consumer-protection statutes. Vinales forecloses that path absent express congressional authorization.
• Drafting of Privatized Military Leases: Boilerplate references to “applicable law” will not import state remedies. DOD contractors must either lobby Congress or rely on federal common-law remedies.
• Attorney-Fee Jurisprudence: The opinion underscores that LLCs are outside the scope of mid-twentieth-century “corporation” language—potentially limiting fee recovery in other enclave contexts (e.g., federal parks concessions, NASA facilities).
• Evidence & Habit-Practice: The decision tightens Rule 406 habit thresholds for plaintiffs seeking to introduce “other tenants’ experiences” to prove systemic housing defects.

4. Complex Concepts Simplified

Federal-Enclave Doctrine

When a state gives the federal government exclusive legislative jurisdiction over land (an “enclave”), state law freezes as of the cession date. Post-cession state statutes do not apply unless Congress—or sometimes the state with Congress’s consent—says so. Existing state law continues only as surrogate federal law, and only if it does not clash with federal policy.

Pre-Cession Law

State statutes and common law that existed on the day the land became an enclave. In this case, the cut-off is 1951 Texas law.

Puffery

Vague superlatives (e.g., “one of the best”) considered sales talk, not factual misrepresentations, and thus non-actionable in fraud claims.

Rule 406 Habit Evidence

Allows admission of evidence showing a defendant’s routine practice on “almost all occasions.” Sporadic examples or a handful of other tenants’ stories generally do not meet the standard.

Article 2226 (1949)

Old Texas statute authorizing attorney fees for successful claims on “oral or written contracts” against a “corporation or individual.” LLCs did not exist in 1949, so the term does not encompass them.

5. Conclusion

Vinales v. AETC II is the most comprehensive Fifth Circuit reaffirmation of the federal-enclave doctrine since Parker Drilling. It:

• Confirms that modern state consumer statutes and remedies (like the Texas DTPA and contemporary fee-shifting laws) do not apply on federal bases absent congressional action,
• Rules that generic contract language referencing “applicable law” cannot contractually import post-cession state law, and
• Clarifies that mid-century Texas Article 2226 does not cover LLC defendants—closing the last plausible door to attorney-fee recovery in many enclave disputes.

Going forward, military families, contractors, and their counsel must build cases—and draft leases—under the understanding that pre-cession state law plus federal common law are the outer limits until Congress legislates otherwise. The precedent is likely to influence litigation at other Texas installations (Fort Cavazos, Lackland AFB) and throughout the Fifth Circuit’s large military footprint.