Eversheds Sutherland 11th Circuit Business Blog
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Formality Needed to Secure Post-Dismissal Amendment Right

Last week, in Cita Trust Co. AG v. Fifth Third Bank, 2018 WL 416253 (11th Cir. Jan 16, 2018), the Eleventh Circuit affirmed the dismissal of a $400-million contract dispute over an unauthorized bond transfer, demonstrating that the court will strictly enforce both procedural rules and contracts negotiated by sophisticated entities. This dispute concerned a transfer of bonds. Cita, a Swiss trust, had contracted with Fifth Third, a U.S. bank, for Fifth Third to take custody of certain bonds purportedly valued at $428 million. For reasons that neither party saw fit to inform the court, Fifth...
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Supreme Court Grants Cert. in Bankruptcy Discharge Case

The Supreme Court granted cert. on January 12, 2018, to review Appling v. Lamar, Archer & Cofrin, LLP (In re Appling), 848 F.3d 953 (11th Cir. 2017), which we reported on below.  The case, which involves the bankruptcy discharge exception for fraud, will be heard this term. Posted by Tom Byrne.
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Court Limits Right to Cure Improper “Shotgun” Pleadings

The term “shotgun pleading” refers to a complaint that, for one reason or other, fails to give the defendants adequate notice of the claims against them. In the Eleventh Circuit, courts have identified roughly four categories of shotgun pleadings: (1) a pleading with multiple counts where each count adopts the allegations of all preceding counts; (2) a pleading that relies on conclusory and vague allegations not tied to any cause of action; (3) a pleading that fails to separate out its various causes of action and claims for relief; and (4) a pleading that asserts numerous claims against...
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Eleventh Circuit Declines to Revisit Dreadlocks Discrimination Case En Banc

Nearly a full year after issuing a revised opinion supporting an initial holding that hairstyles and other “cultural characteristics”—like dreadlocks—cannot form the basis for a Title VII claim of intentional racial discrimination, the Eleventh Circuit denied the Equal Employment Opportunity Commission’s petition for rehearing en banc in EEOC v. Catastrophe Management Solutions (CMS), 2017 WL 6015378 (11th Cir. Dec. 5, 2017). Judge Adalberto Jordan wrote the Eleventh Circuit’s original and revised opinions in the case, and he specially concurred in the denial of rehearing en banc. Doubling...
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Bankruptcy Debtors Can Recover Attorneys’ Fees Spent in Enforcing Stay and Seeking Damages, Including for Appeals

Richard and Patricia Horne filed for bankruptcy protection under Chapter 7 of the Bankruptcy Code. After the bankruptcy was filed and the automatic stay imposed by Section 362(a)(1) went into effect, Mary Mantiply, an attorney, filed a state court action against the Hornes on behalf of Mantiply’s client. Mantiply repeatedly refused to dismiss the case, even after being informed of the bankruptcy and the stay. The Hornes filed a motion in the bankruptcy court seeking damages for Mantiply’s violation of the automatic stay, relying on 11 U.S.C. § 362(k)(1), which provides (subject to an...
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A Private Plaintiff Cannot Sue FINRA for a Violation of Its Own Rules

In Turbeville v. FINRA, 2017 WL 4938821 (11th Cir. Nov. 1, 2017), a panel of the Eleventh Circuit held that a former registered representative’s purported state-law claims against FINRA were properly dismissed because there exists no private right of action against FINRA, a self-regulatory organization (“SRO”), for alleged violations of its own rules. In 2009, FINRA filed an administrative complaint against Turbeville, who was then a registered representative of a FINRA-affiliated firm, alleging that Turbeville had committed securities fraud in his recommendations to an elderly couple. A...
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RIVAL CLASS COUNSEL BATTLE OVER SETTLEMENT

An unseemly squabble between rival class-action firms drew the attention of the Eleventh Circuit in Technology Training Associates, Inc. v. Buccaneers Ltd. Partnership, 2017 WL 4819371 (11th Cir. Oct. 26, 2017).  The court remanded the case for further combat over approval of an approximately $20 million class action settlement in a Telephone Consumer Protection Act case against the Tampa Bay Buccaneers, who allegedly sent out over 180,000 unsolicited faxes concerning tickets.  A class action was brought by Anderson + Wanca (“A + W”).  No settlement could be reached, and cross-motions for...
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Court Compels Individual Arbitration of Consumer Class Action

In Larsen v. Citibank FSB, 871 F.3d 1295 (11th Cir. Sept. 26, 2017), the Eleventh Circuit reversed the Southern District of Florida’s denial of a motion to compel arbitration of a consumer debt class action.  The plaintiff, David Johnson, filed a putative class action alleging that Defendant KeyBank had improperly changed the sequence of debit card transactions to maximize overdraft fees charged to the account. Johnson was a longtime KeyBank customer, having opened his first checking account with the bank in 1991. In October 2001, he opened the 2001 Signature Card.  The 2001 Signature Card...
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Eleventh Circuit Digs Deep to Revive SCAD Trademark Suit

In an October 3, 2017, opinion, a panel of the Eleventh Circuit reversed the Northern District of Georgia’s grant of summary judgment for the defendant in a trademark-infringement suit brought by Savannah College of Art and Design (SCAD).  In Savannah College of Art and Design, Inc. v. Sportswear, Inc., 2017 WL 4369451, the court held that the district court erred in concluding that SCAD had failed to establish that it controlled the use of its name and acronym for use on clothing.  The Court reminded that, while “[i]mitation may be the sincerest form of flattery,” when that imitation...
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YOU CAN’T HAVE YOUR CAKE AND EAT IT TOO: “MIDCO” TRANSACTION EXPOSES SELLERS TO TRANSFEREE LIABILITY

Consider the following situation: You’re a major stockholder in a corporation whose assets have appreciated in value, and you want to sell.  You would really like to structure the deal as a sale of stock in order to avoid capital gains tax on the corporation’s appreciated assets.  When you contact potential buyers, you find that they all want to structure the purchase as an asset sale so that they can take the step-up in basis in the assets—and preferable tax treatment.  What do you do? One option that some people have tried is to use a “middle company,” or “Midco,” arrangement. The general...
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“This is a tax case. Fear not, keep reading.”

These are the opening words of Judge Kevin Newsom’s opinion for the court in Morrissey v. United States, 2017 WL 4229063 (11th Cir. Sept. 25, 2017).  What interested the court in the case were two issues:  whether the expenses that a gay man incurred to father children through in vitro fertilization are deductible medical expenses under section 213 of the Internal Revenue Code; and, if not, whether the denial of the deduction amounted to deprivation of equal protection of the laws. The expenses were not deductible, the court held, because they were not “for the purpose of affecting any . . ....
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Government Official Entitled to Qualified Immunity—No Clearly Established First Amendment Violation in Not Promoting Employee Based on Father’s Speech

In last term’s decision in White v. Pauly, the Supreme Court observed that it has “issued a number of opinions reversing federal courts in qualified immunity cases” in recent years. 137 S. Ct. 548, 551 (2017).  In other words, lower courts have been too quick to conclude that challenged conduct violates “clearly established federal statutory or constitutional rights” (and therefore is not entitled to qualitied immunity), negating the purpose of qualified   immunity to protect “all but the plainly incompetent or those who knowingly violate the law.” Id.  The Court reiterated that “clearly...
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Body Shops Can Proceed with Antitrust Claims Against Auto Insurers

A divided panel of the Eleventh Circuit has reversed the dismissal of antitrust and state law claims asserted by auto body shops against automobile insurers. Quality Auto Painting Ctr. of Roselle, Inc. v. State Farm Indem. Co., 2017 WL 3910750 (11th Cir. Sept. 7, 2017).  Senior Judge Lanier Anderson’s lengthy dissent and partial concurrence would have affirmed the dismissal of all of the plaintiffs’ claims except for their claim for tortious interference. The plaintiff body shops, which operate in four different states (Kentucky, Missouri, New Jersey, and Virginia) asserted claims for...
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Branch Nominated to Court

The White House today announced that the nomination of Georgia Court of Appeals Judge Elizabeth “Lisa” Branch has been sent to the Senate for confirmation. Judge Branch has served on the Georgia Court of Appeals since 2012. Posted by Tom Byrne
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