Eversheds Sutherland 11th Circuit Business Blog
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All-Risk Insurance Coverage Doesn’t Cover All Risks from COVID-19

The Eleventh Circuit has answered an important and timely question about insurance coverage for business losses due to COVID-19. Under Florida law, an “all-risk” insurance policy covering direct physical loss or damage does not insure against losses and expenses incurred by businesses as a result of COVID-19. In SA Palm Beach, LLC v. Certain Underwriters at Lloyd’s London, 2022 U.S. App. LEXIS 12210 (11th Cir. May 5, 2022), the court considered the particular policy language at issue in four cases consolidated on appeal providing coverage for “direct physical loss of or damage to” property...
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Passing the Test: ADA “Tester” Plaintiff Has Standing to Sue Based on Lack of Information on Hotel’s Website

An ADA plaintiff sufficiently pleaded a concrete intangible injury, and thus had standing to sue, when she alleged that she was unable to access information on a hotel’s website about accommodations for persons with disabilities, even though she visited the hotel only as a “tester” plaintiff and had no intent to return. Laufer v. Arpan LLC, 2022 U.S. App. LEXIS 8270 (11th Cir. Mar. 29, 2022), involved a plaintiff with a disability under the Americans with Disabilities Act who acted as a “tester” plaintiff, monitoring places of public accommodation and their websites for compliance with the...
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Federal Arbitration Act, Not Georgia Arbitration Code, Applied to Review of Arbitration Award

In Gulfstream Aerospace Corp. v. OCELTIP Aviation 1 PTY Ltd, 2022 U.S. App. LEXIS 10382 (11th Cir. Apr. 18, 2022), the Eleventh Circuit rejected an argument that the parties’ contract provided for the Georgia Arbitration Code (“GAC”), rather than the Federal Arbitration Act (“FAA”), to apply to proceedings to confirm or vacate an arbitration award. The underlying dispute arose from an agreement for the sale of a business jet. Gulfstream (a Georgia company) said that Oceltip (an Australian company) failed to pay for the aircraft as required by the parties’ agreement; Oceltip said that...
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Plaintiff’s Coal Gasification Claims Go Up in Smoke, $13 Million Verdict on Defendant’s Counterclaim Remains

In MidAmerica C2L Inc. v. Siemens Energy Inc., 25 F.4th 1312 (11th Cir. Feb. 15, 2022), the Eleventh Circuit rejected an appeal from a $13.2 million verdict for the defendant in a lawsuit over coal gasification equipment. In an opinion written by Judge Barbara Lagoa and joined by Judges Newsom and Branch, the court affirmed, holding that the district court did not err by (a) excluding certain expert testimony; (b) entering summary judgment against each of the plaintiff’s claims; (c) denying the plaintiff’s repeated attempts to amend its complaint; and (d) denying the plaintiff’s motion for...
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Paradise Found: Consumer Not Damaged by Purchasing (and Consuming) Gin Containing Prohibited “Grains of Paradise”

The Eleventh Circuit again had the opportunity to interpret the scope of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA), this time applying the Act’s safe-harbor provision for actions otherwise permitted by law. In Marrache v. Bacardi U.S.A., Inc., 17 F.4th 1084 (11th Cir. Nov. 8, 2021), the court affirmed dismissal of a putative class action that had attempted to hold a beverage manufacturer and a supermarket chain liable under the FDUTPA for selling alcohol that included an additive (grains of paradise) prohibited by a Florida statute but specifically allowed under federal...
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“Local Controversy” CAFA Exception Not Established by Proof of Class Citizenship

An inartfully pleaded class definition coupled with a failure of proof was enough to prevent a class-action plaintiff from invoking the Class Action Fairness Act’s “local controversy” exception to avoid removal from the sheltering arms of a Florida circuit court, according to the Eleventh Circuit in Simring v. GreenSky, LLC, 2022 U.S. App. LEXIS 8002 (11th Cir. Mar. 28, 2022). The plaintiff filed a putative false-advertising class action in Florida state court against a physician who advertised stem cell treatments for neuropathy and against his finance source, GreenSky. GreenSky removed the...
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“Business Development Managers” Fall Under FLSA Administrative Exemption, Not Entitled to Overtime

In Brown v. Nexus Business Solutions, LLC, 2022 U.S. App. LEXIS 8777 (11th Cir. Apr. 1, 2022), the Eleventh Circuit held that “business development managers,” tasked with persuading corporate customers to purchase General Motors vehicles for their fleets, are not entitled to overtime compensation under the Fair Labor Standards Act (FLSA). The business development managers were employed through a third-party firm to develop leads and deliver sales presentations for potential corporate customers of GM vehicles. Several business development managers brought suit against their employer alleging...
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Restaurant’s Mandatory Service Charge is Not a “Tip” Under FLSA

Tipped employees at Miami’s Nusr-et Steakhouse sued their employer, alleging that the restaurant violated the Fair Labor Standards Act by counting payments to employees from the restaurant’s mandatory 18% “service charge” as part of the employees’ “regular rate of pay,” rather than as tips. The district court rejected the employees’ claim and granted the restaurant’s motion for summary judgment, holding that the service charge was not a tip. In Compere v. Nusret Miami, LLC, 2022 U.S. App. LEXIS 7293 (11th Cir. Mar. 18, 2022), the Eleventh Circuit affirmed. The “service charge” at issue is...
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Divided Panel Denies Petition to Appeal Sua Sponte Remand to State Court

In Ruhlen v. Holiday Haven Homeowners, Inc., 2022 U.S. App. LEXIS 6184 (11th Cir. Mar. 9, 2022), a divided panel of the Eleventh Circuit held that the court lacked appellate jurisdiction to review a district court’s sua sponte remand to state court for lack of subject-matter jurisdiction. The underlying dispute concerned the presence or absence of jurisdiction under the Class Action Fairness Act (“CAFA”) over a case raising claims brought in a “‘representative capacity under Rule 1.222 of the Florida Rules of Civil Procedure and Section 723.075’ of the Florida Statutes.” The district court...
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Interlocutory Appeal Properly Taken from Declaratory Judgment on Insurer’s Duty to Defend; Ambiguous Exclusion Construed in Favor of Coverage

When a liability insurer seeks a declaratory judgment on whether it has a duty to defend and indemnify an insured, and the district court enters an order finding a duty to defend but putting off a decision on the duty to indemnify, is that nonfinal order subject to interlocutory appeal? In James River Insurance Co. v. Ultratec Special Effects Inc., 22 F.4th 1246 (11th Cir. Jan. 13, 2022), the Eleventh Circuit confirmed that, yes, such an order is appealable, and affirmed summary judgment for the insureds in that case after concluding that the relevant policy exclusion was ambiguous and did...
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Court Vacates Preliminary Injunction Enforcing Non-Disclosure Covenant Where Former Employer Did Not Allege Any Prior Violation and Did Not Establish a Legitimate Business Interest in Customer Relationships

In an appeal of a preliminary injunction, the Eleventh Circuit dismissed part of the appeal as moot while vacating the remaining provisions of the preliminary injunction. Vital Pharm., Inc. v. Alfieri, 2022 U.S. App. LEXIS 1771 (11th Cir. Jan. 20, 2022). Vital Pharmaceuticals, Inc. brought suit against four former employees and a competitor based on certain restrictive covenants in its employment agreements with the employees. The employment agreements contained the following three restrictive covenants: (1) the employees agreed not to work for a competing company during the term of...
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Roth IRAs, Like Traditional IRAs, Are Excluded from a Georgia Debtor’s Bankruptcy Estate

In a case of first impression, the Eleventh Circuit held that Roth IRAs are excluded from Georgia debtors’ bankruptcy estates under the Bankruptcy Code and Georgia’s garnishment statute. In Hoffman v. Signature Bank of Georgia (In re Hoffman), 2022 U.S. App. LEXIS 2119 (11th Cir. Jan. 24, 2022), the court reversed the district court’s affirmance of the bankruptcy court’s order concluding that the debtor’s Roth IRAs were not excluded from his bankruptcy estate. Writing for the court, Judge Wilson explained that § 541(c)(2) of the Bankruptcy Code excludes from a bankruptcy estate property of...
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No Direct Physical Loss or Damage, No Coverage: All-Risk Policy Does Not Cover Lost Profits Due to COVID-19 Government Restrictions

The Eleventh Circuit held that an insured’s policy did not cover the lost profits it suffered as a result of government restrictions implemented in response to the COVID-19 pandemic because the policy only covered “direct physical loss or damage.” Ascent Hospitality Management Co. v. Employers Insurance Co. of Wasau, 2022 U.S. App. LEXIS 1161 (11th Cir. Jan. 14, 2022), follows just a few months after the court handed down its first insurer victory in a pandemic coverage appeal in Gilreath Family & Cosmetic Dentistry, Inc. v. Cincinnati Insurance Co., 2021 U.S. App. LEXIS 26196 (11th Cir....
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Treasury Department Conservation Easement Regulation Invalidated

In an important development in the ongoing litigation over taxation of conservation easements, Hewitt v. Commissioner, 2021 U.S. App. LEXIS 38555 (11th Cir. Dec. 29, 2021), invalidated a U.S. Treasury Department regulation issued in 1986 for failure to comply with the Administrative Procedure Act.  The panel reversed a United States Tax Court’s decision, and remanded the case for further proceedings in accordance with that ruling.  The facts of the case center on a 2012 conservation easement donation made by the Hewitts.  This conservation easement was created over property...
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