Eversheds Sutherland 11th Circuit Business Blog
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Email Service of Motion to Vacate Arbitration Award Not Sufficient Without Prior Express Consent, and Agreement to Arbitrate Under AAA Rules Does Not Provide Such Consent

The Eleventh Circuit rejected an argument from a party seeking to vacate an arbitration award that an email courtesy copy of a “notice of motion” was effective service under the Federal Arbitration Act.  In O’Neal Constructors, LLC v. DRT America, LLC, 2021 WL 1220710 (11th Cir. Apr. 1, 2021), the appellant, DRT, sought to vacate an arbitration award in O’Neal’s favor. Section 12 of the Federal Arbitration Act (“FAA”) requires a party seeking to vacate an arbitration award to serve notice of a motion to vacate within three months after the award is delivered.  9 U.S.C. § 12. ...
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General Statistical Evidence of “Local Controversy” Held Insufficient for Jurisdiction Under Class Action Fairness Act

Can class-action plaintiffs avoid federal court by relying on general economic studies and  population statistics to prove that their case should be in state court? Not in the Eleventh Circuit. In Smith v. Marcus & Millichap, Inc., 2021 WL 939184 (11th Cir. Mar. 12, 2021), the court held that “studies, surveys, and census data—which do not directly involve the plaintiffs”—are not “sufficient to establish that a certain percentage of the plaintiff class are citizens of a particular state for the purposes of CAFA’s local controversy and discretionary exceptions.” Smith concerned the...
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Equipment Distributor Can’t Defeat Summary Judgment on Claims that Competitor Conspired with Manufacturer to Terminate Business with Distributor

The Eleventh Circuit affirmed summary judgment for a defendant facing claims under the Sherman Antitrust Act, concluding that the plaintiff’s evidence was “at least ‘as equally consistent with permissible competition as it is with an illegal conspiracy.’” The court’s decision in American Contractors Supply, LLC v. HD Supply Construction Supply, Ltd., 2021 WL 822194 (11th Cir. Mar. 4. 2021), underscores the high bar for plaintiffs alleging an unlawful vertical conspiracy. To defeat summary judgment, a plaintiff must affirmatively present evidence “tending to exclude the inference” that the...
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Derivative Jurisdiction Doctrine Does Not Apply to Personal Jurisdiction

In the category of legal doctrines that have outlived whatever usefulness that they once had falls the doctrine of “derivative jurisdiction”—that a federal district court must dismiss a removed case if the state court from which it was removed lacked subject-matter jurisdiction. The doctrine was repealed by statute for cases removed under the general removal provision, 28 U.S.C. § 1441(f), but the question remains whether it has any viability with respect to cases removed under other provisions. In Reynolds v. Behrman Capital IV L.P., 2021 WL 683997 (11th Cir. Feb. 23, 2021), the court...
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Appeal on the Merits Untimely, and Costs Award to Defendant Under Rule 68 Affirmed, in FLSA Case

In a hectic end to 2020, we almost overlooked an interesting appellate procedure opinion affecting FLSA cases, Vasconcelo v. Miami Auto Max, Inc., 981 F.3d 934 (11th Cir. 2020). In Vasconcelo, the Eleventh Circuit dismissed an FLSA plaintiff’s appeal on the merits as untimely; affirmed the district court’s attorneys’ fees award, which awarded less than the plaintiff had sought; and affirmed the district court’s application of Rule 68 to tax costs against the plaintiff. Vasconcelo worked as a sales associate at a car dealership. He brought an action against the dealership and its owner,...
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Increased Risk of Identity Theft Cannot Establish Article III Standing in Data Breach Cases

The Eleventh Circuit has now taken a stand on whether a substantial risk of identity theft, fraud, and other future harm constitutes Article III standing in data breach cases.  Tsao v. Captiva MVP Rest. Partners, LLC, 2021 WL 381948 (11th Cir. Feb. 4, 2021).  In an opinion authored by Senior Judge Tjoflat, the Eleventh Circuit affirmed the lower court’s decision, holding that plaintiff Tsao lacked Article III standing because he could not demonstrate a substantial risk of identity theft and because he cannot manufacture standing.  The court dismissed the case without...
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Administrative Feasibility Not Separate Class Certification Requirement

The Eleventh Circuit aligned itself last week with the majority of circuits in holding that a threshold determination that identifying class members is administratively feasible is not a separate requirement for class certification. The ruling, in the closely-watched case of Cherry v. Dometic Corp., 2021 WL 346121 (11th Cir. Feb. 2, 2021), which attracted numerous amicus briefs, represents a minor victory for the plaintiffs’ class-action bar. The issue before the court was framed in terms of the “ascertainability” requirement for membership in a class action. The specific issue was whether...
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Court Rejects Challenges to SEC Subpoenas

The Eleventh Circuit rejected jurisdictional and relevance challenges to SEC subpoenas in SEC v. Marin, 982 F.3d 1341 (11th Cir. 2020). The SEC issued subpoenas to Carla Marin and MinTrade Technologies pursuant to a formal order of investigation (“FOI”) authorizing the Commission to investigate whether a Tampa-based limited liability company called Traders Café, and its “officers, directors, employees, partners, subsidiaries, and/or affiliates, or other persons or entities,” had engaged, or were about to be engaged in, unregistered broker-dealer conduct in violation of Section 15(a) of the...
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Court Upholds (Again) $20 Million Punitive-Damages Verdict Against Phillip Morris

In what may be one of the last Engle progeny cases to reach the Eleventh Circuit, the court again upheld an award of punitive damages against the tobacco company defendant, rejecting Phillip Morris’s argument that the award—which was over 3 times the amount of compensatory damages awarded to the individual plaintiff—was unconstitutionally excessive in violation of due process. Cote I The latest decision, in Cote v. Philip Morris USA, Inc., No. 19-14074 (Jan. 19, 2021) (Cote II), comes more than six years after a jury awarded the individual plaintiff $6.25 million in compensatory damages and...
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No Heightened Duty Owed to Class Representatives by Class Counsel

Counsel for a proposed class do not owe the named class representatives a heightened fiduciary duty relative to other class members. So held the Eleventh Circuit in Medical & Chiropractic Clinic, Inc. v. Oppenheim, 981 F.3d 983 (11th Cir. 2020), a decision which marked the court’s return to an unseemly controversy stemming from litigation against the Tampa Bay Buccaneers alleging violations of the federal Telephone Consumer Protection Act (TCPA). A previous decision [posted here] reversed a district court’s decision not to allow a class member to intervene in a class action in which a...
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End of Engle Cigarette Litigation in Eleventh Circuit?

Judge Kevin Newsom begins his opinion for the court in Harris v. R.J. Reynolds Tobacco Co., 2020 WL 6816965 (11th Cir. Nov. 20, 2020), with the auspicious observation that this Engle case is “one of the last that we’re likely to see.” Correct or not, the comment evokes the long history in the Eleventh Circuit of the progeny of the Florida Supreme Court’s landmark decision in Engle v. Liggett Group, Inc.,945 So. 2d 1246 (Fla. 2006). In Harris, the court considered whether Gerald Harris was a member of the Engle class, a group of plaintiffs who brought suit against several tobacco companies...
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Summary Judgment for Defendants Affirmed in Securities Fraud Case

In Whitehead v. BBVA Compass Bank, 2020 WL 6536897 (11th Cir. Nov. 6, 2020), the Eleventh Circuit affirmed summary judgment in favor of the defendant bank and bank officer on the plaintiff’s claims for securities fraud.  The plaintiff, an investor, claimed that the defendants wrongfully failed to inform him of the risks involved in acquiring a certain CD for his investment portfolio. The investor sought as damages the amount he lost when he surrendered the CD some 19 months after acquiring it. The district court granted the defendants’ motion for summary judgment, and the Eleventh...
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Eleventh Circuit Bans Incentive Payments to Lead Plaintiffs in Class Actions

In what appears to be a first, the Eleventh Circuit recently held that federal law prohibits so-called “incentive payments” to class representatives, even as part of an agreed settlement. The court acknowledged that it was forging a new path in Johnson v. NPAS Solutions, LLC, 975 F.3d 1244, 1248–49 (11th Cir. 2020)—identifying errors that it said had “become commonplace in everyday class-action practice” and noting that the district court had “handled the class-action settlement here in pretty much exactly the same way that hundreds of courts before it have handled similar settlements.” But...
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Divided En Banc Court Dismisses FACTA Claims for Lack of Article III Standing

In Muransky v. Godiva Chocolatier, Inc., 2020 WL 6305084 (11th Cir. Oct. 28, 2020), a divided en banc court vacated the district court’s order approving a class-action settlement and directed that the case be dismissed because the plaintiff lacked standing sufficient to establish subject-matter jurisdiction. Muransky filed a putative class action against Godiva, alleging that the chocolatier had willfully violated the Fair and Accurate Credit Transactions Act (“FACTA”) by including on customers’ receipts more than the last five digits of their credit card numbers.  The inclusion of...
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