Eversheds Sutherland 11th Circuit Business Blog
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Eleventh Circuit Invalidates Liquidated Damages Provision As Impermissible Penalty

In Autauga Quality Cotton Association v. Crosby, 2018 WL 3097948 (June 25, 2018), the Eleventh Circuit invalidated a liquidated damages provision, holding it to be an impermissible penalty under Alabama law. Appellant Autauga Quality Cotton Association is a not-for-profit cotton-marketing association based in Central Alabama whose mission is to provide price stability to both farmers and consumers by pooling the cotton grown by its more than 1,000 members and then marketing it for sale.  The appellees are individual members of the Crosby family who own a cotton farm in Alabama and who were...
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Eleventh Circuit Invalidates FTC Cease and Desist Order

In LabMD, Inc. v. Fed. Trade Comm’n, No. 16-16270, 2018 WL 3056794 (11th Cir. June 6, 2018), the Eleventh Circuit vacated an FTC cease and desist order, finding that the order was unenforceable because it lacked the required specificity that would enable the order to be enforced by a court. LabMD is a now-defunct medical laboratory. Given the nature of its work, LabMD was subject to data-security regulations issued under HIPPAA.  LabMD employed a data-security program in an effort to comply with those regulations.  Sometime in 2005, contrary to LabMD policy, a LabMB billing manager...
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Remediation Plans Don’t Necessarily Moot Independent Claims for Similar Injunctive Relief Under the ADA

Can a remediation plan designed to settle one lawsuit moot claims for similar injunctive relief in another case? Maybe in some contexts, but the Eleventh Circuit rejected that argument on the facts presented in Haynes v. Hooters of America, LLC, 2018 WL 3030840 (11th Cir. June 19, 2018), an ADA dispute over website accessibility for the blind. Haynes had sued for declaratory and injunctive relief under Title III of the Americans with Disabilities Act, demanding that the defendant upgrade its company website to ensure compatibility with “screen reader” software used by visitors with visual...
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Court Revives Suit Against Employer that Allegedly Denied Woman Promotion for Not Being Korean

  The Eleventh Circuit recently gave new life to a plaintiff’s claims of employment discrimination. Jerberee Jefferson v. Sewon America, Inc., No. 17-11802 (11th Cir. June 1, 2018). Jerberee Jefferson, an African-American woman, filed suit against her former employer, Sewon America, Inc., for racial discrimination and retaliatory termination.  Although Jefferson began her career at Sewon working in finance, she desired to transfer to the information technology department.  To achieve this goal, she took classes at a local college and, when a position opened up in IT, she requested a...
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Rule 41 Not Proper Method to Dismiss Particular Claims

What is the proper procedure for voluntarily dismissing a count in a civil action? This question is not explicitly answered by the text of the Federal Rules of Civil Procedure. The Eleventh Circuit offered a tutorial in Perry v. Schumacher Group of Louisiana, 2018 WL 2473721 (11th Cir. June 4, 2018), making clear that Fed. R. Civ. P. 41(a)(1)(A) is not an available mechanism for dismissals of anything short of the entire action. That rule’s plain text refers to dismissal of an “action” and permits dismissal by notice before an answer or summary judgment motion is filed and by stipulation of...
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Toxicology Expert’s Opinions Properly Excluded for Failure to Consider Dose-Response Relationship or Potential Alternative Causes of Plaintiff’s Disease

In Williams v. Mosaic Fertilizer, LLC, 2018 WL 2191426 (11th Cir. May 14, 2018), the Eleventh Circuit affirmed the District Court’s exclusion of proffered expert testimony by a toxicologist, and of the plaintiff’s proposed lay testimony that her home had “no present value” because of emissions from a nearby fertilizer plant, and affirmed the resulting grant of summary judgment to the defendant. Plaintiff Rhonda Williams has always lived in Tampa, Florida, about three miles away from the defendant’s fertilizer plant. She suffers from pulmonary hypertension, diabetes, and other health...
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Venezuela’s Attempt to Purchase Bolívar Artifacts from Florida Resident Was “Commercial Activity” Not Subject to Sovereign Immunity

In Devengoechea v. Bolivarian Republic of Venezuela, No. 16-16816 (11th Cir. May 10, 2018), the Eleventh Circuit held that the Foreign Sovereign Immunities Act’s “commercial activity” exception to sovereign immunity applied to Venezuela’s alleged failure to return or pay for a collection of artifacts owned by a Florida resident. Plaintiff Ricardo Devengoechea, a citizen of the United States and Florida resident, inherited a collection of documents and artifacts which had belonged to Simón Bolívar. According to the plaintiff’s complaint against Venezuela, Venezuelan officials, including the...
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Bank Did Not Waive Arbitration Rights Against Unnamed Class Members

In the latest appeal emanating from the Checking Account Overdraft Litigation MDL proceeding pending in the Southern District of Florida, the Eleventh Circuit returned to a question that it dodged in a previous appeal: whether Wells Fargo waived its arbitration rights as to unnamed members of a certified class. Gutierrez v. Wells Fargo Bank, NA, No. 16-16820 (11th Cir. May 10, 2018). Early on in the underlying litigation, consolidated class-action challenges to overdraft fees, Wells Fargo had decided not to file a motion to compel arbitration as to the named class representatives. Instead,...
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FLSA Opt-Ins Become Party Plaintiffs Upon Filing Written Consents

In Mickles v. Country Club Inc., 2018 WL 1835316 (11th Cir. Apr. 18, 2018), the Eleventh Circuit held, considering a question of first impression in any circuit, that filing a written consent to proceed as a party plaintiff in an FLSA collective action confers party plaintiff status on the filer, even if no collective action is certified. Mickles filed her complaint in April 2014, alleging that Country Club had improperly classified her and other similarly situated employees as independent contractors. Over the next few months, three other employees, Houston, McAllister, and Lemon, filed...
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False Claims Act Statute of Limitations Extended

An extended limitations period—up to ten years, in some circumstances—is applicable to actions by private plaintiffs under the False Claims Act (FCA) even when the government declines to intervene, according to a recent Eleventh Circuit decision, United States ex rel. Hunt v. Cochise Consultancy, Inc., 2018 WL 1736788 (11th Cir. Apr. 11, 2018). In so holding, the court staked out a position on a contentious statutory provision that embodies a more expansive view of FCA liability than other circuits that have considered the issue. A little background is in order. The FCA is intended to root...
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COURT GRANTS EN BANC REHEARING IN BODY SHOPS’ INSURANCE ANTITRUST ACTION

The Eleventh Circuit voted to accept en banc rehearing in Quality Auto Painting Center of Roselle, Inc. v. State Farm Indemnity Co., 870 F.3d 1262 (11th Cir. 2017), a decision we covered here last September. The now-vacated panel decision, authored by Judge Wilson, had reversed the dismissal of antitrust and state-law claims asserted by auto-body-shop owners against a number of automobile insurers. The grant of rehearing is not surprising given the lengthy dissent (and partial concurrence) authored by Senior Judge Anderson. Judges Marcus, Rosenbaum, Julie Carnes, and Jill Pryor have all...
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GEORGIA SUPREME COURT JUSTICE BRITT GRANT NOMINATED TO ELEVENTH CIRCUIT

The White House announced yesterday the nomination of Georgia Supreme Court Justice Britt Grant to fill the seat on the Eleventh Circuit opened by the pending retirement of Judge Julie Carnes. Justice Grant has served on the Supreme Court for a year and three months. She was appointed to the Court by Governor Nathan Deal after serving as Georgia’s Solicitor General for a year. She previously worked in various positions in the George W. Bush administration. If confirmed, she would be the Eleventh Circuit’s youngest judge. Justice Grant would be President Trump’s third appointment to the...
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Judge Julie Carnes to take Senior Status, Opening Seat on Eleventh Circuit

After serving as an active federal judge for more than a quarter-century, Eleventh Circuit Judge Julie Carnes announced last week that she will take senior status effective June 18, 2018. Judge Carnes has spent her entire career in public service. Following graduation from the University of Georgia Law School in 1975, Judge Carnes clerked for Judge Lewis R. Morgan on the United States Court of Appeals for the Fifth Circuit. Thereafter, she worked as Assistant United States Attorney, eventually becoming the Appellate Chief of the Criminal Division. In 1992, President George H.W. Bush...
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Forfeited Deposit Not Capital Gain in Real Estate Deal

In a case of first impression, the Eleventh Circuit affirmed that a taxpayer could not treat as long-term capital gain its retention of a nonrefundable deposit after a would-be buyer defaulted on an agreement to purchase real property used in the taxpayer’s trade or business. CRI-Leslie, LLC v. Comm’r, 882 F.3d 1026 (11th Cir. 2018). Under the facts of the case, the taxpayer, CRI-Leslie LLC, entered into an agreement to sell real property used in CRI-Leslie’s trade or business for $39.2 million, $9.7 million of which was paid immediately to CRI-Leslie as a nonrefundable deposit. The deal...
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