United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

____________ FILED June 12, 2025 No. 23-60537 Lyle W. Cayce Clerk ____________ Caleb Crabtree; Adriane Crabtree, as assignees of the claims of Casey Cotton,

Plaintiffs—Appellants,

versus Allstate Property and Casualty Insurance Company; John Does 1-5,

Defendants—Appellees. ______________________________

Appeal from the United States District Court for the Southern District of Mississippi USDC No. 1:22-CV-348 ______________________________ Before Smith, Wiener, and Douglas, Circuit Judges. Jerry E. Smith, Circuit Judge: This appeal turns on whether Mississippi’s champerty statute, Miss. Code Ann. § 97-9-11 (Rev. 2013), voids an assignment of a cause of action to a disinterested third party. 1 We certified that dispositive question of state _____________________ 1 “Champerty is generally defined as a bargain between a stranger and a party to a lawsuit by which the stranger pursues the party’s claim in consideration of receiving part of any judgment proceeds.” Sneed v. Ford Motor Co., 735 So. 2d 306, 309 (Miss. 1999) (citation modified). Case: 23-60537 Document: 85-1 Page: 2 Date Filed: 06/12/2025

No. 23-60537

law to the Supreme Court of Mississippi: Does Miss. Code Ann. § 97-9-11 (Rev. 2013) allow a creditor in bankruptcy to engage a disinterested third party to purchase a cause of action from a debtor? Crabtree v. Allstate Prop. & Cas. Ins. Co. (Crabtree I), No. 23-60537, 2024 WL 3451894, at *1 (5th Cir. July 18, 2024) (unpublished). The Supreme Court of Mississippi answered that question in the negative: “This Court finds that the plain language of Mississippi Code Section 97-9-11 (Rev. 2020) prohibits a disinterested third party engaged by a bankruptcy creditor from purchasing a cause of action from a debtor’s estate.” Crabtree v. Allstate Prop. & Cas. Ins. Co. (Crabtree II), --- So. 3d ----, 2025 WL 1409047, at *1 (Miss. 2025). In accordance with that answer to our certified question, we hold that the Crabtrees have not asserted an injury caused by Allstate because they never acquired Cotton’s bad-faith claim against Allstate. We therefore affirm the district court’s dismissal for lack of subject matter jurisdiction. I. We summarized the facts of this case in Crabtree I:

Casey Cotton rear-ended Caleb Crabtree, causing Crabtree extensive injuries. Cotton was insured by Allstate, but Crabtree’s injuries exceeded Cotton’s policy limit, meaning that Cotton risked liability for the excess should he be found at fault. Allegedly, Allstate refused to settle with Crabtree and did not inform Cotton of those settlement negotiations or of Cotton’s potential personal liability. Those failures gave Cotton a potential claim for bad faith against Allstate. Crabtree and his wife sued Cotton, who declared bankruptcy. The bankruptcy court allowed the personal-injury action to proceed to tri