Eversheds Sutherland 11th Circuit Business Blog
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Rule 23(f) Petitions to Eleventh Circuit

One question that Eleventh Circuit litigants often ask is how likely the court is to grant a Rule 23(f) petition for interlocutory review of a class certification decision.  Litigants who have been on the wrong end of a class certification decision ask this question with particular urgency because an interlocutory appeal—before the trial on the merits—can often save a case.  Defendants who have received adverse certification decisions face pressure to settle rather than facing the uncertain prospects of a suit on the merits and a subsequent appeal of the certification decision.  For would-be...
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Offer to “Resolve” Time-Barred Debt States Fair Debt Collection Claim

The Eleventh Circuit took on a circuit-splitting issue under the Fair Debt Collection Practices Act in Holzman v. Malcolm S. Gerald & Associates, 2019 WL 1495642 (11th Cir. Apr. 5, 2019).  The case arose from the defendants’ efforts to collect a time-barred debt.  The plaintiff alleged that the collection letter he received was “false, deceptive, or misleading,” in violation of FDCPA’s § 1692e, and that the general practice of attempting to collect on time-barred debts violated FDCPA’s § 1692f’s prohibition of unfair or unconscionable practices.  The plaintiff also alleged the practices...
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Loan Servicer’s “Obvious” Willful Violation of the Fair Credit Reporting Act Warrants Revival of Plaintiffs’ Claims for Emotional-Distress and Punitive Damages

Last week, in Marchisio v. Carrington Mortgage Services, LLC, 2019 WL 1320522 (11th Cir. Mar. 25, 2019), the Eleventh Circuit, taking a somewhat exasperated tone, addressed claims against a mortgage servicer whose repeated misreporting of a consumer account—even after a history of litigation and two settlement agreements—was an “obvious” violation of the Fair Credit Reporting Act. The 60-page opinion, authored by Judge Julie Carnes, discusses the FCRA, the Florida Consumer Collection Practices Act, availability of emotional-distress and punitive damages, agency law, and contract...
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Full Eleventh Circuit Dismisses Car Shop Antitrust Claims against Insurers

In Quality Auto Painting Center of Roselle, Inc. v. State Farm Indemnity Co., 2019 WL 1006973, on March 4, 2019, the Eleventh Circuit, sitting en banc, addressed the sufficiency of five complaints brought under the Sherman Act for price-fixing and group boycotting and state law claims for unjust enrichment, quantum meruit, and tortious interference. The plaintiff auto body shops alleged that insurance companies, who supply the vast majority of the body shops’ revenue, had conspired to ultimately depress the amounts they pay to the body shops for repairs on behalf of their insureds. Roughly...
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Supreme Court Clarifies Law on Late-Filed Rule 23(f) Petitions

This week, the Supreme Court ruled that the 14-day deadline to file an interlocutory appeal of a district court’s class certification decision is not subject to equitable tolling.  Nutraceutical Corp. v. Lambert, No. 17-1094, 2019 WL 920828 (U.S. Feb. 26, 2019).  In Nutraceutical, after the district court issued a decision decertifying the class, the plaintiff filed a motion for reconsideration 20 days later and filed a Rule 23(f) petition for review of the decision to decertify the class a further 14 days after the motion for reconsideration was denied.  The Ninth Circuit reasoned that...
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A Takings Claim By Any Other Name . . . May Not Succeed

In Hillcrest Property, LLP v. Pasco County, 2019 WL 580259 (11th Cir. Feb. 13, 2019), the Eleventh Circuit confirmed that allegedly unlawful application of a land-use ordinance does not give rise to a substantive due process claim.  As the court previously held in McKinney v. Pate, 20 F.3d 1550 (11th Cir. 1994), “executive action never gives rise to a substantive-due-process claim unless it infringes on a fundamental right.”  A particular land-use decision is executive (as opposed to legislative) action, satisfying the first criterion set out in McKinney, and property rights are...
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Eleventh Circuit Holds That An Already-Married Couple Can Form An “Association-In-Fact” Enterprise Under The Civil RICO Statute Without Creating A New Entity

This week, in Al-Rayes v. Willingham, 2019 WL 441325 (11th Cir. Feb. 5, 2019) the Eleventh Circuit held that a married couple cannot escape civil liability under the Racketeer Influenced and Corrupt Organizations Act solely on the basis that their marriage preceded the illegal acts and they did not form a formal entity in executing those acts. In 2006, the plaintiff in this case, Mr. Al-Rayes, had sued Mr. Willingham (the defendant’s husband) and his businesses alleging that they had defrauded him in various ways.  Al-Rayes obtained a $25m consent judgement, but was unable to...
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Supreme Court to Rule on Securities Exchange Act Split Involving Eleventh Circuit

Earlier this month, the Supreme Court granted certiorari in Emulex Corp. v. Varjabedian, No. 18-459, 2019 WL 98542 (U.S. Jan. 4, 2019), in order to address a circuit split over Section 14(e) of the Securities Exchange Act, 15 U.S.C. § 78n(e), which addresses misstatements and omissions regarding tender offers.  Courts of Appeals disagree over whether the claims under the section require scienter (knowledge that the conduct is wrongful) or may be based on merely negligent misstatements and omissions. In Emulex, a corporation made an omission in a recommendation to accept a tender offer that...
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Reinvestment of Tax Shelter Proceeds Is Not a Valid “Business Purpose”

The Eleventh Circuit last week decided a tax case exploring the appropriate scope of factual review for the economic substance and business purpose doctrines. Curtis Investment Co. v. Commissioner, 2018 WL 6380325 (11th Cir. Dec. 6, 2018). These two doctrines allow courts and the IRS to make a substance-over-form review of suspected tax avoidance activities. In order to claim a tax benefit, the underlying transaction must have both economic substance and a business purpose. In an opinion by Judge Chuck Wilson, the court affirmed that transactions lacking a business purpose cannot create...
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Some Claims are Stronger than Others—Eleventh Circuit Revives Protein Supplement Maker’s Lanham Act Claim But Holds that Georgia Uniform Deceptive Trade Practices Act Claim is Preempted by Federal Law

The Eleventh Circuit recently reversed in part and affirmed in part the dismissal of a complaint alleging violations of the Georgia Uniform Deceptive Trade Practices Act, O.C.G.A. § 10-1-372, and the federal Lanham Act, 15 U.S.C. § 1125(a). Hi-Tech Pharm., Inc. v. HBS Int’l, 2018 WL 6314282 (11th Cir. Dec. 4, 2018). The case presented important questions about the relationship between the labeling requirements of the Food, Drug, and Cosmetic Act (“the FDCA”), 21 U.S.C. § 301 et seq., and state and federal laws prohibiting deceptive advertising. The Eleventh Circuit affirmed the lower court’s...
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Eleventh Circuit Restores $20m Punitive-Damages Verdict Against Philip Morris

The Eleventh Circuit last week reinstated a $20.76m punitive-damages verdict against tobacco giant Philip Morris, ruling that the district court had abused its discretion in ordering a new trial on the plaintiff’s intentional tort claims.  Cote v. R.J. Reynolds Tobacco Co., 2018 WL 6167395 (11th Cir. Nov. 26, 2018).  The court also affirmed the denial of Philip Morris’s motions for a new trial and for judgment as a matter of law as to the plaintiff’s other claims. This case forms part of the court’s rapidly-developing line of Engle-progeny cases.  These cases stem from the Florida Supreme...
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Supreme Court to Consider TCPA Circuit Split on Interpretation of “Advertisement”

The Supreme Court will address a circuit split over the interpretation of the Telephone Consumer Protection Act’s provision imposing liability for sending unsolicited advertisements.  PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., No. 17-1705, 2018 WL 3127423 (U.S. Nov. 13, 2018).  The majority view—held by the Eleventh Circuit—is that an unsolicited fax is only a prohibited “advertisement” if it attempts to promote the sale of a product.  Florence Endocrine Clinic, PLLC v. Arriva Med., LLC, 858 F.3d 1362, 1366 (11th Cir. 2017).  The minority view is that there is no such...
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Arbitration on a Hot Shingled Roof: Homeowners Bound by Arbitration Agreement Printed on Shingle Wrapping

Homeowners are bound by a mandatory-arbitration provision printed conspicuously on the wrapping around packages of shingles when the packages are opened and installed by the homeowners’ roofers, as a matter of Florida contract law.  Dye v. Tamko Building Products, Inc., 2018 WL 5729085 (11th Cir. Nov. 2, 2018). Two Florida homeowners whose roofers had purchased, opened, and installed Tamko shingles on the homeowners’ roofs brought an action against Tamko in federal court, asserting various claims based on the shingles’ alleged failure to meet industry standards and building codes.  Tamko...
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Unregistered Copyright Does Not Preclude Federal Jurisdiction

Capping off an October trio of copyright decisions, the Eleventh Circuit in Fastcase, Inc. v. Lawriter, LLC, 2018 WL 5318148 (11th Cir. Oct. 29, 2018), confirmed that the failure to register a copyright does not defeat federal subject-matter jurisdiction (though it may doom an infringement claim under Rule 12(b)(6)).  The court also held that a plaintiff’s potential liability may be considered as part of the amount in controversy when assessing diversity jurisdiction. Fastcase and Lawriter are competitors in the market for legal research services.  Their dispute concerns access to the...
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