Eversheds Sutherland 11th Circuit Business Blog
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End of Engle Cigarette Litigation in Eleventh Circuit?

Judge Kevin Newsom begins his opinion for the court in Harris v. R.J. Reynolds Tobacco Co., 2020 WL 6816965 (11th Cir. Nov. 20, 2020), with the auspicious observation that this Engle case is “one of the last that we’re likely to see.” Correct or not, the comment evokes the long history in the Eleventh Circuit of the progeny of the Florida Supreme Court’s landmark decision in Engle v. Liggett Group, Inc.,945 So. 2d 1246 (Fla. 2006). In Harris, the court considered whether Gerald Harris was a member of the Engle class, a group of plaintiffs who brought suit against several tobacco companies...
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Summary Judgment for Defendants Affirmed in Securities Fraud Case

In Whitehead v. BBVA Compass Bank, 2020 WL 6536897 (11th Cir. Nov. 6, 2020), the Eleventh Circuit affirmed summary judgment in favor of the defendant bank and bank officer on the plaintiff’s claims for securities fraud.  The plaintiff, an investor, claimed that the defendants wrongfully failed to inform him of the risks involved in acquiring a certain CD for his investment portfolio. The investor sought as damages the amount he lost when he surrendered the CD some 19 months after acquiring it. The district court granted the defendants’ motion for summary judgment, and the Eleventh...
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Eleventh Circuit Bans Incentive Payments to Lead Plaintiffs in Class Actions

In what appears to be a first, the Eleventh Circuit recently held that federal law prohibits so-called “incentive payments” to class representatives, even as part of an agreed settlement. The court acknowledged that it was forging a new path in Johnson v. NPAS Solutions, LLC, 975 F.3d 1244, 1248–49 (11th Cir. 2020)—identifying errors that it said had “become commonplace in everyday class-action practice” and noting that the district court had “handled the class-action settlement here in pretty much exactly the same way that hundreds of courts before it have handled similar settlements.” But...
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Divided En Banc Court Dismisses FACTA Claims for Lack of Article III Standing

In Muransky v. Godiva Chocolatier, Inc., 2020 WL 6305084 (11th Cir. Oct. 28, 2020), a divided en banc court vacated the district court’s order approving a class-action settlement and directed that the case be dismissed because the plaintiff lacked standing sufficient to establish subject-matter jurisdiction. Muransky filed a putative class action against Godiva, alleging that the chocolatier had willfully violated the Fair and Accurate Credit Transactions Act (“FACTA”) by including on customers’ receipts more than the last five digits of their credit card numbers.  The inclusion of...
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Conservation Easements with a Limited Reservation of Development Rights Are Potentially Deductible

In Pine Mountain Preserve LLLP v. Commissioner, 2020 WL 6193897 (11th Cir. Oct. 22, 2020), the Eleventh Circuit was asked whether a grantor’s reservation of limited development rights prevents a conservation easement from satisfying the requirements to claim a charitable deduction under the qualified conservation contribution rules of section 170(h) of the Internal Revenue Code. In an opinion by Judge Newsom, the court reasoned that a limited reservation of development rights is not per se fatal to a conservation easement, but may result in the easement failing to “adequately protect[]” its...
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A Sticky Situation: Epoxy Company Is Stuck With Evidence of Intent to Copy, and Evidence of Actual Confusion

The interplay between circumstantial evidence under the Lanham Act’s substantive law of trade dress infringement and the rules for summary judgment was at issue in J-B Weld Co. v. Gorilla Glue Co., 2020 WL 6144561 (11th Cir. Oct. 20, 2020).  In J-B Weld,all three judges agreed that the district court erred in entering summary judgment for the defendant.  In an opinion authored by Senior Judge Tjoflat, the Eleventh Circuit reversed the summary judgment dismissing the Lanham Act trade dress infringement claim, and remanded to the district court for trial.  In analyzing the likelihood of...
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Employee Arbitration Award Stands Despite Arbitrators’ Alleged Misinterpretation of the Contract

The Eleventh Circuit refused to vacate an employee’s arbitration award for nearly $4 million for wrongful termination based on the employer’s claim that the arbitration panel misinterpreted the parties’ employment and arbitration agreements in Gherardi v. Citigroup Global Markets Inc., 2020 WL 5553255 (11th Cir. Sept. 17, 2020). The employee brought several claims in arbitration, including a claim for wrongful termination, when his employer fired him three days after he sent his employer a letter threatening to challenge in arbitration a “final warning” letter, which he received from his...
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Eleventh Circuit Sets the Bar for Bar Orders

In SEC v. Quiros, 966 F.3d 1195 (July 20, 2020), the Eleventh Circuit held that the district court abused its discretion when it entered a bar order extinguishing non-parties’ claims, because entry of the order was not necessary to resolve the parties’ dispute. In 2016, the SEC filed a civil enforcement action against Ariel Quiros, and the district court appointed a receiver to take control of Quiros’s corporations.  Other actions against Quiros followed, and he hired two law firms to defend them.  Quiros couldn’t pay the lawyers, though, because the district court in the SEC action had...
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Herbalife Top Distributors Lose Arbitration Bid

Top distributors of the sometimes controversial nutrition products marketer Herbalife lost their bid to compel arbitration of RICO and related claims made by lower-level distributors in Lavigne v. Herbalife, Ltd., 2020 WL 4342671 (11th Cir. July 29, 2020), which affirmed the order of a Florida district court. The top distributors, alleged to be part of Herbalife’s “Circle of Success,” were accused in the putative class action of participating with Herbalife in a conspiracy that caused the named plaintiffs to lose thousands of dollars on the basis of fraudulent claims of prospective riches....
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En Banc Court Affirms Summary Judgment in Sharply Divided Decision

In Gogel v. Kia Motors Manufacturing of Georgia, Inc., 2020 WL 4342677 (11th Cir. July 29, 2020), a divided en banc court affirmed the grant of summary judgment to an employer on retaliation claims under Title VII and § 1981, reversing the original panel opinion and producing some testy exchanges among members of the court.  Plaintiff Gogel alleged that she was the victim of gender and national origin discrimination and retaliation after she filed an EEOC charge against Defendant Kia.  Judge Branch authored the majority opinion, in which Chief Judge William Pryor and Circuit Judges Grant,...
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Eleventh Circuit Decision Highlights Difficulty of Invoking Federal-Question Jurisdiction Over Claim for Declaratory Relief

The United States Constitution created federal courts of limited subject-matter jurisdiction. Thus, a party filing suit in federal court must assert a claim arising under federal law or demonstrate that the litigants are citizens of different states. Generally, a claim brought pursuant to the federal Declaratory Judgment Act is alone insufficient to invoke federal-question jurisdiction. In Patel v. Hamilton Medical Center, Inc., the Eleventh Circuit reaffirmed this principle, holding “a plaintiff cannot create federal-question jurisdiction by seeking a declaration that a federal defense does...
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Too Late At The District Court Is Still Too Late At The Appellate Court

The Eleventh Circuit’s opinion in Corley v. Long-Lewis, Inc., 2020 WL 4006602 (11th Cir. July 16, 2020), delivered by Judge William Pryor, primarily concerned questions of appellate jurisdiction, all of which were resolved in favor of hearing the appeal. The multi-faceted procedural history set the stage for the issues of appellate jurisdiction: A case that had been transferred from the Northern District of Alabama to the Eastern District of Pennsylvania, where a motion to reconsider partial summary judgment was denied, was transferred back to the Northern District of Alabama, where a motion...
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Third-Party Counterclaim Defendants’ Removal Bid Foiled

“Perhaps some might think removal is not the most riveting topic,” begins Judge Robin Rosenbaum’s opinion for the court in Bowling v. U.S. Bank National Association, 2020 WL 3424928 (11th Cir. June 23, 2020). (Not so with our readers, most of whom relish a good removal.) The removal issue in Bowling stemmed from the Supreme Court’s decision in Home Depot U.S.A., Inc. v. Jackson, 139 S. Ct. 1743 (2019), which held that third-party counterclaim defendants, i.e., defendants joined as additional parties to a counterclaim filed by the original defendant, were not “defendants” who could exercise...
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Eleventh Circuit Upholds Forum-Selection Clause

In DeRoy v. Carnival Corp., 2020 WL 3525536 (11th Cir. June 30, 2020), the Eleventh Circuit upheld a forum-selection clause requiring litigation of claims in federal court.  Plaintiff-Appellee Carmela DeRoy sued Defendant-Appellant Carnival Corporation after she injured her foot on a rug while onboard the Carnival Valor.  The contract DeRoy entered into when she booked her ticket had a forum-selection clause requiring all litigation to proceed in federal court “if federal jurisdiction lies for the claim.”  DeRoy simultaneously sued Carnival in both state and federal court alleging a single...
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