Eversheds Sutherland 11th Circuit Business Blog
content top

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...
Continue Reading

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...
Continue Reading

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...
Continue Reading

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...
Continue Reading

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...
Continue Reading

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...
Continue Reading

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...
Continue Reading

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...
Continue Reading

Eleventh Circuit Takes District Court to School Over Educational Fair-Use Copyright Dispute

In Cambridge Univiversity Press v. Albert, 2018 WL 5095004 (11th Cir. Oct. 19, 2018), the Eleventh Circuit issued its second decision in a decade-long dispute over Georgia State University’s practice of distributing digital excerpts of copyrighted works to students without paying a royalty.  The district court now faces its third trial to assess the fair-use defense as to 48 excerpted works, with little more guidance than the four fair-use factors, and an admonition to give each accused excerpt a “holistic, qualitative, and individual analysis.” Judge Bill Pryor’s opinion for the court...
Continue Reading

Laws for the People, By the People, Are Not Copyrightable

A March 23, 2017 order from the United States District Court for the Northern District of Georgia immediately prompted headlines such as “If you publish Georgia’s state laws, you’ll get sued for copyright and lose.”  The case, Code Revision Commission v. Public.Resource.Org, Inc., 244 F. Supp. 3d 1350 (N.D. Ga. 2017), examined whether the Official Code of Georgia Annotated (“O.C.G.A.”) was copyrightable and whether verbatim copying and free distribution by an open records activist were considered copyright infringement.  After a discussion of how annotations are explicitly listed under the...
Continue Reading

SCOTUS Business Cases This Term (Part 2 – Arbitration)

The Court has several arbitration-related cases before it this term.  Lamps Plus, Inc. v. Varela concerns whether the FAA permits a state-law interpretation of an arbitration agreement that finds a contractual basis for class arbitration without class arbitration’s being specifically mentioned.  New Prime, Inc. v. Oliveira involves the FAA’s exception for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.”  And Henry Schein, Inc. v. Archer and White Sales, Inc. asks whether a court may...
Continue Reading

Court Revives Challenge to Stranger-Originated Life Insurance Policies (STOLIs)

In Sun Life Assurance Co. of Canada v. Imperial Premium Finance, LLC, 2018 WL 4443054 (11th Cir. Sept. 18, 2018), the Eleventh Circuit reversed the dismissal of fraud and breach of contract claims related to the sale of life insurance policies to strangers to the insureds.  Sun Life Assurance Company sold life insurance to senior citizens, who, in some cases, obtained premium financing with Imperial Premium Finance.  The life insurance policies served as collateral to the financing, so, if an insured defaulted on the loan, Imperial could foreclose on the loan and obtain ownership of the...
Continue Reading

SCOTUS Business Cases This Term (Part 1 – Class Actions)

The Supreme Court’s October term is underway, and the Court has before it several class-action cases.  Frank v. Gaos concerns the permissibility of cy pres relief in class action settlements; Home Depot v. Jackson the ability of a defendant in the original action to remove the action under CAFA; and Nutraceutical Corp. v. Lambert the availability of equitable exceptions to the 14-day time limit for filing a petition under Fed. R. Civ. P....
Continue Reading

Disclosure of Additional Digits on a Credit Card Receipt Sufficient to Confer Article III Standing to Bring a FACTA Claim

The Eleventh Circuit has held that a plaintiff has standing to pursue a claim under the Fair and Accurate Credit Transactions Act (“FACTA”) if a merchant discloses too many digits of a credit card number on a receipt, even without subsequent misuse of the plaintiff’s identity or credit card.  Muransky v. Godiva Chocolatier, Inc., 2018 WL 4762434 (11th Cir. Oct. 3, 2018). Muransky filed a putative class action against Godiva, alleging that Godiva had willfully violated FACTA by including on customers’ receipts more than the last five digits of their credit card numbers.  The inclusion of...
Continue Reading