Eversheds Sutherland 11th Circuit Business Blog
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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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Eleventh Circuit Reverses Forum Non Conveniens Dismissal

In Otto Candies, LLC v. Citigroup, Inc., 2020 WL 3550680 (11th Cir. July 1, 2020), the Eleventh Circuit reversed the forum non conveniens dismissal of a complaint brought by two U.S. plaintiffs, and 37 foreign plaintiffs, against U.S.-based Citigroup. The plaintiffs, asserting RICO, fraud, and other state-law claims, alleged that they had contracted with or invested in a Mexican company, Oceanografia S.A. de C.V., on the basis of fraudulent cash advances made to Oceanografia by a Citigroup subsidiary.  The plaintiffs claimed that the advances were overseen by a Citigroup division based in...
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State Law Determines Whether Claim Brought Under Federal Statutory Law is Direct or Derivative

Federal courts should look to state law to decide whether a claim brought under a federal statute is direct or derivative, according to the Eleventh Circuit. The court addressed this issue for the first time in Freedman v. magicJack Vocaltec Ltd., 2020 WL 3467396 (11th Cir. June 25, 2020), a class action filed by a shareholder, alleging that the defendant corporation, magicJack, made material misrepresentations and/or omissions in two proxy statements. The alleged misrepresentations related to the valuation of another company that magicJack acquired and a compensation package for magicJack’s...
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HVAC Heater Case Won’t Be Heating Up: Dismissal Affirmed

The Eleventh Circuit’s decision on Monday in Warren Technology, Inc. v. UL LLC, 2020 WL 3406585 (11th Cir. June 22, 2020), turned on the basic question of whether the complaint’s allegation of a misrepresentation was a fact that needed to be accepted as true or could be ignored as a mere conclusory allegation. Defendant UL LLC is a nationally recognized testing laboratory that tests HVAC heaters and authorizes the manufacturer to use its certification mark on compliant products. The plaintiff heater manufacturer’s complaint was simple: UL made a misrepresentation of fact by certifying...
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Judge William Pryor Becomes Chief Judge of Eleventh Circuit

The Eleventh Circuit welcomed a new chief judge this week, as the Hon. William H. Pryor Jr. replaced the Hon. Ed Carnes in that role on the latter’s seventieth birthday, in accordance with 28 U.S.C. § 45. Judge Carnes had previously given notice of his intention to take senior status, and District Judge Andrew Brasher (of the Middle District of Alabama) has already been confirmed to replace Judge Carnes as an active circuit judge. Posted by Lee Peifer.
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Defendant Must Prove that Copied Portion of Copyrighted Work is Unprotectable

In Compulife Software Inc. v. Newman, 2020 WL 2549505 (11th Cir. May 20, 2020), the Eleventh Circuit clarified that a plaintiff, having established that the defendant copied part of a copyrighted work, need not prove that the copied portion was legally protectable; the defendant must prove that it was not.  The court also reviewed the elements of a trade-secret claim under Florida law. The parties to the dispute provide insurance premium quotes electronically.  The plaintiff, Compulife, maintains premium information in its “Transformative Database,” which can’t be replicated without a...
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Tax Service’s Registered Trademark’s Suggestiveness Presented Jury Question

In Engineered Tax Services, Inc. v. Scarpello Consulting, Inc., 2020 WL 2478863 (11th Cir. May 14, 2020), the Eleventh Circuit reversed and remanded the district court’s grant of summary judgment for Scarpello Consulting in a trademark dispute over the distinctiveness of the service mark “Engineered Tax Services,” citing previous rulings on substantive trademark law and its  application when a defendant seeks summary judgment of invalidity. The decision elaborated on how to apply the imagination and third-party use tests for determining whether a given mark is suggestive rather than...
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