Eversheds Sutherland 11th Circuit Business Blog
content top

Sharing Information with Trusted Vendors Does Not Confer Article III Standing for FDCPA Claim

The en banc Eleventh Circuit has issued its third and presumably final opinion in the tortured history of Hunstein v. Preferred Collection & Management Services, Inc., 2022 U.S. App. LEXIS 25233 (11th Cir. Sept. 8, 2022).  The court held that the plaintiff failed to allege facts sufficient to establish Article III standing to assert a claim under the Fair Debt Collection Practices Act (FDCPA).  Writing for the majority, Judge Grant cited the Supreme Court’s holding in TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021), that “harm from a statutory violation ha[s] to be ‘real’ in order to...
Continue Reading

Tax Penalty May Be Communicated to Taxpayer Prior to Required Supervisory Approval

In Kroner v. Commissioner, 2022 U.S. App. LEXIS 25650 (11th Cir. Sept. 13, 2022), the court reversed a U.S. Tax Court decision to hold that the Internal Revenue Service (“IRS”) did not violate section 6751(b) of the Internal Revenue Code when it obtained supervisory approval prior to the assessment of a tax penalty, even though the penalty was communicated to the taxpayer prior to supervisory approval. Between 2005 and 2007, Kroner received nearly $25 million in wire transfers from a business partner, which he believed to be excludable from income as gifts for tax purposes.  He did not...
Continue Reading

No Class-Action Tolling for Chiquita Terrorism Plaintiffs

The court was presented with a set of exotic facts in Garcia v. Chiquita Brands International, 2022 U.S. App. LEXIS 25192 (11th Cir. Sept. 8, 2022), but applied two familiar principles of civil procedure to decide the relatively narrow issues on appeal. The decision was the court’s second in the controversy arising from Chiquita’s guilty plea to unlawfully funding a paramilitary terrorist group operating in Colombia over the course of a decade. A putative class action was filed against Chiquita in 2007 that included federal claims. Those claims, however, were dismissed by an Eleventh Circuit...
Continue Reading

Declaratory Judgment Did Not Extinguish Right to Demand Prejudgment Interest Under Georgia Law

In FDIC v. Certain Underwriters at Lloyd’s of London, 2022 U.S. App. LEXIS 23203 (11th Cir. Aug. 19, 2022), the Eleventh Circuit held that a demand for prejudgment interest made after entry of a declaratory judgment was timely under Georgia law. The FDIC, as receiver for Omni National Bank, sued some of Omni’s former officers and directors for negligence. Those cases settled, with the settlement agreements calling for the FDIC to seek to recover stipulated judgments against the defendants from an insurance policy issued to the bank by Lloyd’s Underwriters. The underwriters, in turn, sued the...
Continue Reading

Equitable Estoppel Unavailable to Require Reimbursement from Treasury of Taxes Paid Under Protest

In Affordable Bio Feedstock, Inc. v United States, 2022 U.S. App. LEXIS 20577 (11th Cir. July 26, 2022), the Eleventh Circuit held that the taxpayer was not eligible for reimbursement of protest payments made to the Internal Revenue Service (“IRS”) because “payments of money from the Federal Treasury are limited to those authorized by statute.” The sole issue before the court was “whether any court may order that funds be appropriated from the Federal Treasury based on equitable estoppel without specific authorization from Congress.” Affordable Bio Feedstock (“ABF”) was a waste-to-energy...
Continue Reading

Court Confirms That Same Personal-Jurisdiction Standards Apply Under Fifth and Fourteenth Amendments

In Herederos de Roberto Gomez Cabrera, LLC v. Teck Resources Ltd., 2022 U.S. App. LEXIS 22473 (11th Cir. Aug. 12, 2022), the Eleventh Circuit held that the “minimum contacts” analysis applied to determine the existence of personal jurisdiction under the Fourteenth Amendment also applies when jurisdiction is asserted under the Fifth Amendment. The case involved a claim by a Florida LLC that the defendant Canadian company, Teck Resources, violated the Helms-Burton Act by trafficking in property that had been confiscated by the Cuban government. Teck moved to dismiss for lack of personal...
Continue Reading

Court Adopts a Double Scienter Requirement for Establishing Violations of Section 1202(b) of the Digital Millennium Copyright Act

In Victor Elias Photography, LLC v. Ice Portal, Inc., 2022 U.S. App. LEXIS 22472 (11th Cir. Aug. 12, 2022), the Eleventh Circuit adopted a “double scienter requirement” for copyright infringement under 17 U.S.C. § 1202(b) of the Digital Millennium Copyright Act (“DMCA”). This standard requires a copyright owner to demonstrate that an alleged infringer had knowledge not only of its conduct, but also of the likelihood that the conduct would result in copyright infringement. A unanimous appellate panel affirmed a district court’s granting of summary judgment in favor of the defendant, finding...
Continue Reading

Arbitration Agreement’s Delegation Clause Must Be Enforced Even If Arbitration of Underlying Claims Prohibited by Statute

In Attix v. Carrington Mortgage Services, LLC, 35 F.4th 1284 (11th Cir. May 26, 2022), the Eleventh Circuit reversed a district court’s denial of a motion to compel arbitration and enforced the parties’ agreement to delegate to the arbitrator questions of arbitrability, including whether arbitration itself was precluded by the Dodd-Frank Act. The decision not only reinforces the continued importance of delegation provisions in arbitration agreements, it also is notable for its rejection of a “partial delegation” interpretation of the parties’ arbitration agreement. Attix involved claims...
Continue Reading

SLUSA CLASS ACTION BAR IS BROAD ENOUGH TO COVER EVEN SOME BREACH OF FIDUCIARY DUTY CLAIMS

In Cochran v. Penn Mutual Life Insurance Co., 35 F.4th 1310 (11th Cir. May 31, 2022), the Eleventh Circuit affirmed the district court’s dismissal of a claim for breach of fiduciary duty as barred by the Securities Litigation Uniform Standards Act (SLUSA). After Jeffrey Cochran’s 401(k) retirement plan was terminated by his employer, he transferred his funds into a rollover individual retirement account with HTK, a brokerage firm and investment adviser wholly owned by Penn Mutual Life Insurance Company (“Penn Mutual”). An HTK advisor “urged and directed” Cochran to invest his retirement...
Continue Reading

No “Follow-the-Fortunes” Doctrine Where a Reinsurance Agreement’s Terms Are Plainly Inconsistent with the Doctrine

The Eleventh Circuit in Public Risk Management of Florida v. Munich Reinsurance America, Inc., 38 F.4th 1298 (11th Cir. June 29, 2022), held that courts cannot infer application of the “follow-the fortunes” doctrine where a reinsurance agreement’s plain and unambiguous language is inconsistent with the doctrine. Public Risk Management of Florida (“PRM”), a self-insured intergovernmental risk-management program that exclusively insures local governments in Florida, brought suit against one of its reinsurers, Munich Reinsurance of America, Inc. (“Munich”). The reinsurance agreement between...
Continue Reading

Eleventh Circuit Upholds “Floating” Forum Selection Clause

In AFC Franchising, LLC v. Purugganan, 2022 U.S. App. LEXIS 22323 (11th Cir. Aug. 11, 2022), the Eleventh Circuit held that an individual consented to personal jurisdiction and venue by agreeing to a “floating” forum selection clause. Danilo Purugganan entered into a “Master Developer Agreement” with Doctors Express Franchising in 2009. The parties agreed that the contract would be governed by Maryland law and that “all actions . . . between you and us must be commenced in a state or federal court of competent jurisdiction within such state or judicial district in which we have our principal...
Continue Reading

Settlement Class Defined to Include Uninjured Members Cannot Be Approved

An appeal concerning the meaning of coupon settlements under the Class Action Fairness Act instead produced an important opinion, Drazen v. Pinto, 2022 LEXIS 20766 (11th Cir. July 27, 2022), addressing the certification of classes that are defined to include members who have not been injured. Some background may be helpful in understanding the ruling. In TransUnion LLC v. Ramirez, 141 S. Ct. 2190 (2021), the Supreme Court held that class members who do not have standing are not entitled to participate in any damage recovery by the class. The Court vacated a jury’s award of damages under the...
Continue Reading

Rule 11 Motion May Be Filed After Final Judgment, Provided 21-Day Safe Harbor Period Has Run

The Eleventh Circuit recently confirmed that a litigant may file a Rule 11 motion even after final judgment has been entered—notwithstanding arguably contrary language in some of the court’s prior decisions—as long as the 21-day safe harbor period required by the rule has run. Huggins v. Lueder, Larkin & Hunter, LLC, 39 F.4th 1342 (11th Cir. July 12, 2022). The law firm Lueder, Larkin & Hunter represented a homeowners’ association in lawsuits seeking to collect delinquent dues, and later found itself on the receiving end of a complaint filed by homeowners alleging that the firm had...
Continue Reading

ERISA Beneficiary May Recover as “Appropriate Equitable Relief” Benefits Lost Due to Fiduciary’s Breach

The Eleventh Circuit has joined every other Court of Appeals to consider the issue by holding that an ERISA beneficiary may recover under ERISA’s Section 1132(a)(3), which permits an action for “appropriate equitable relief,” benefits lost as a result of a breach of fiduciary duty. Gimeno v. NCHMD, Inc., 38 F.4th 910 (11th Cir. June 28, 2022). Justin Polga was a doctor employed by NCHMD, Inc. When Dr. Polga was hired, he elected to add $350,000 in supplemental life insurance to his benefits, and NCHMD’s human resources staff helped him complete the insurance enrollment paperwork. Polga...
Continue Reading