Eversheds Sutherland 11th Circuit Business Blog
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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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Supreme Court Scorecard: Looking Back at the 2016 Term and Forward to October

After a tough record in 2015, the Eleventh Circuit batted .400 last term at the U.S. Supreme Court. In the Court’s five merits decisions on appeal from the Eleventh Circuit, two judgments were affirmed, two were reversed, and one was vacated. The two affirmances were both in criminal cases with majority opinions by Justice Thomas. In Beckles v. United States, 137 S. Ct. 886 (Mar. 6, 2017), the Court held that U.S. Sentencing Guidelines cannot be challenged as void for vagueness. In Manrique v. United States, 137 S. Ct 1266 (Apr. 19, 2017), the Court held that a criminal defendant can forfeit...
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No Willful Violation of Fair Credit Reporting Act If Report Technically Accurate, Even If Misleading, Given Split on “Maximum Possible Accuracy”

In Pedro v. TransUnion LLC, 2017 WL 3623926 (11th Cir. Aug. 24, 2017), the Eleventh Circuit concluded that a consumer reporting agency did not adopt an “objectively unreasonable interpretation” of the Fair Credit Reporting Act (“FCRA”) when it stated on a consumer’s credit report that she was an authorized user of her parents’ credit card account (which later went into default) and also included the account when calculating her credit score, causing the score to fall. The plaintiff, Kathleen Pedro, complained it was inaccurate for TransUnion (and Equifax, which she later dismissed) to list...
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Judge Frank M. Hull Taking Senior Status

The media are reporting that Judge Hull has informed President Trump that she intends to take senior status.  She has been on the Eleventh Circuit for almost twenty years, after being elevated from the Northern District of Georgia by President Bill Clinton in 1997.  This vacancy will give President Trump his second opportunity to appoint a member of the Eleventh Circuit, after Kevin Newsom was confirmed as the court’s newest judge earlier this August. Judge Hull started her legal career as a law clerk to Eversheds Sutherland founding partner Judge Elbert P. Tuttle. Posted by Margaret...
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Don’t Call Me Maybe—TCPA Consent Can Be Partially Revoked

The Eleventh Circuit has held that the TCPA permits a consumer to partially revoke her consent to be called. Schweitzer v. Comenity Bank, 2017 WL 3429381 (11th Cir. Aug. 10, 2017). Emily Schweitzer had a past-due credit card account with Comenity Bank. The bank called her cell phone (the number which she had provided in her application) using an autodialer.  In October 2013, during a conversation with a bank representative, Schweitzer said, “if you guys cannot call me, like, in the morning and during the work day, because I’m working, and I can’t really be talking about these things while...
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Court Rejects Plaintiff’s Claims for FLSA and Rehabilitation Act Violations

This week the Eleventh Circuit affirmed the lower court’s (N.D. Ala.) decision to reject a city employee’s claims for violations of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. §§ 201-219, and the Rehabilitation Act of 1973 (“Rehabilitation Act”), 29 U.S.C. § 794. Boyle v. City of Pell City, 2017 WL 3429383 (11th Cir. Aug. 10, 2017). Judge Fay, writing for the three- judge panel, held that “the law simply does not require an employer to demote or discharge an employee” or create a new position “to accommodate another employee who is disabled.” The City of Pell City (the “City”) employed...
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“Gateway” Issue Delegation to an Arbitrator is Enforceable, Without Qualifications; Circuit Split Noted

The Eleventh Circuit enforced an employment-related arbitration agreement’s provision delegating to the arbitrator “gateway” questions of arbitrability in Jones v. Waffle House, Inc., 2017 WL 3381100 (11th Cir. Aug. 7, 2017).  The opinion, written by Judge Marcus and joined by Judge Hull and Judge Clevenger visiting from the Federal Circuit, also rejects the notion, adopted by the Fifth, Sixth, and Federal Circuits, that a court may except from the delegation analysis claims the court considers “wholly groundless.” Jones unsuccessfully applied for a job at a Florida Waffle House in 2014. He...
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Appeal time runs from stipulation of dismissal filing—not subsequent order

Fed. R. Civ. P. 41(a)(1)(A)(ii) provides that an action may be dismissed, without a court order, by filing “a stipulation of dismissal signed by all parties who have appeared.” Almost invariably, however, district courts respond to the filing of a stipulation of dismissal with their own order of dismissal, as if to make the dismissal official.  In Love v. Wal-Mart Stores, Inc., 2017 WL 3301353 (11th Cir. Aug. 3, 2017), the Eleventh Circuit analyzed which of these two filings—the stipulation or the order—commences the time running for the filing of a notice of appeal. In an opinion for the...
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