Appellate Judges
Class Action Legal Ethics are Different Says Creative Eleventh Circuit And Relying On Old 5th Cir. Precedent
Experience teaches that it is counsel for the class representative and not the named parties, who direct and manage these actions. Every experienced federal judge knows that any statements to the contrary is sheer sophistry.
LIT COMMENTARY
The Eleventh Circuit panel get creative to try and rewrite legal ethics rules on the basis that a class action lawsuit is different from other civil cases. The district judge (sitting by designation) who authored the opinion goes off on a lengthy wordsmithed opinion for the panel. In order to try and make the square peg fit the round hole, the 11th Circuit rely on ole friends and precedent at the 5th Circuit, but the one cited ‘precedential’ case, Kincade v. General Tire Rubber Co., 635 F.2d 501 (5th Cir. 1981), falls apart when analyzed.
LIT’s Review
Upon reading Bergman, Class Action Lawyers: Fools for Clients 4 AM. Jur. Trial Advoc. 243, 262-63 (1980), p. 264+, “The Harms Becoming Class Counsel” addressing “Conflicts of Interest, Appearance of Professional Impropriety, Possibility of Forced Withdrawal”, etc., the panel at the 11th Circuit only references a general conflict of interest as opined in Sayler. However, the conflict runs way deeper than that, for example, the appearance of professional impropriety is not even considered nor mentioned in this courts’ opinion.
For way of background, below is an article and expressed opinion by Eric Troutman, a class action ‘Czar’ who explains this case scenario; where 3 law firms are greedily fighting for a huge cash windfall from the Buccaneers for spamming unauthorized faxes in a marketing blast which ultimately ends up with all the class actions imploding – and no-one receives a dime from the NFL company. The crux of the matter is the lawyer switching law firms, the results thereafter and the ethics questions raised.
Despite the class action and settlement failing, the 11th Circuit still issued this opinion – on a legal ethics appeal (fiduciary duty/conflict of interest).
LIT can only assume it was done for two reasons;
(i) in order to issue a warning to the true and injured parties because they filed the civil complaint in state court rather than federal court. That’s right, the opinion is used as a warning for filing a case in state court (described herein) rather than deeming it ‘moot’ and;
An Overview of Judicial Independence from Impeachments
to Court-Packing by Hon. R. David Proctor.
Proctor is not shy in his condemnatory view of State authority.
(ii) the warning was also seen as an opportunity for the 11th Circuit to lay the foundation for an incorrect legal standard in future similar ethics [class action] cases (as this case is published, it is now precedential).
It’s of grave concern when legal ethics and conflicts of interest is widely accepted and known to be an area controlled by the relevant state rules on professional conduct for lawyers, in this case Florida.
Certainly, as the Fifth Circuit opined in In re American Airlines, Inc., 972 F.2d 605 (5th Cir. 1992), federal laws always apply, but they also determined they are controlled by state ethics rules (which mirror ABA rules) and these are more than not embedded into the local rules as well. See, for example, S.D. Tex. Rules, Appendix A.
In summary, LIT contends Proctor has overstepped his mark and the 2 circuit judges on the panel are culpable as well, and here’s why:
Proctor’s wordsmithed opinion is best summarized by his colleagues from the 3rd Circuit, and maybe that’s why he’s a District Judge trying to do an Appellate Judge’s job, poorly;
“Experience teaches that it is counsel for the class representative and not the named parties, who direct and manage these actions. Every experienced federal judge knows that any statements to the contrary is sheer sophistry*.” Greenfield v. Villager Industries, Inc., 483 F.2d 824, 832 n.9 (3d Cir. 1973) – a distinguished opinion.
* A fallacious argument.
Richard H. Underwood, Legal Ethics and Class Actions: Problems, Tactics and Judicial Responses, 71 Ky.L.J. 787 (1983).
“[Buccaneers’ counsel] is a settler”—Fascinating New COA Decision Sheds Light on the Secret Chatter and Tactics of TCPA Class Action Lawyers
I hadn’t planned to blog again today but when I started reading Med. & Chiropractic Clinic, Inc. v. Oppenheim, No. 18-13714, 2020 U.S. App. LEXIS 37439 (11th Cir. December 1, 2020) I had to move some things around.
In the case the Eleventh Circuit Court of Appeals considered a spat between two class action law firms, and it is just a remarkable tale and there is so much to learn from it here.
The fight started when a big shot partner at one of the firms left to join another firm (this never goes well–trust me.) Deciding to make the transition even harder than it needed to be, big shot decided to encourage new firm to settle a series of class actions involving faxes sent by the NFL’s Buccaneers franchise—don’t get me started on the faxball angle here— that his old firm had been pursuing, only for a lower price than his former firm had been willing to deal for.
That upset members of yet another firm that also had class action lawsuits pending against the Buccaneers for sending the faxes. The third firm—allegedly with funding from first firm—sued the big shot and the second firm for allegedly using confidential information obtained while big shot was at the first firm to help the second firm score the big settlement.
The Eleventh Circuit ultimately agreed that big shot did nothing wrong and second firm’s settlement was just fine–although the settlement itself ended up getting blown up anyway.
But that, somehow, is the boring part.
The fascinating part is all the gossip and secret stuff the decision unveils.
For instance, how often do you get a chance to peek inside high-stakes negotiations in a class action mediation? Well, I mean, I get to do it all the time. But how often do you get to?
Check out this paragraph:
[First firm partner] wanted a larger settlement than the Buccaneers were willing to pay. [First firm partner] refused to settle for less than a $99,000,000 “settlement fund” and a $24,750,000 attorney fee (25% of the settlement fund). When talks stalled, [Mediator] suggested the parties negotiate the fund in a bracket between $10,000,000 and $50,000,000. [Firm firm partner] was less than enthusiastic and responded, “I am NOT going down to $50 million on this case.”
Not going “down” to $50MM. On a fax case. Against a storied and beloved Tampa Bay sports franchise. (Hey, I have an uncle who is a huge Bucs fan. “They’re big on defense” he still tells me with sincerity.)
Later in the decision former partner and his new pals at second law firm explain that this is all about ego. In his words:
“Yeah. [first firm partner] wants to set a record above the Capital One $75 million settlement. The magistrate judge it’s in front of is squeamish and is giving the Defendants a broad shot at disproving [vicarious liability].”
Later, they comment: “[Buccaneers’ counsel] is a settler” suggesting that they have a “mark” in defense counsel and are hankering to exploit his/her tendencies.
So new firm and big shot partner think they have an easy mark of a defense lawyer and a good case with a former law firm that is just trying to hang a pelt on the wall with the biggest TCPA settlement in history. That’s a great recipe to step in and settle out from under the former firm right? (Pigs fat, hogs slaughtered, and all that).
Only one problem—they don’t have a client.
No problem, actually. New firm launches a direct mail campaign to find folks interested in bringing class action lawsuits. They then cross reference phone numbers from individuals expressing interest in easy money (my characterization, not the court’s) against the list of phone numbers filed by expert Robert Biggerstaff in furtherance of certification of the earlier suit to find class members to bring a new suit.
Pause.
Read that sentence again.
The new law firm used the list of class member phone numbers filed with the expert report lodged by the first law firm to seek certification and used it to find class members to sue in a second suit.
This is why you must always oppose the production of data before class certification folks. I mean, along with all of the other reasons. If you don’t get what I’m saying call me and we can talk it through.
So then things get even better. First law firm finds out that second law firm has found a new plaintiff and filed a competing suit (in state court mind you) and goes ballistic making filings in both state and federal court designed to prevent the new suit from going forward.
Second law firm responds to these machination sin the best possible way—it dismisses its suit, but goes ahead and secretly mediates the case on a classwide basis with the Buccaneers anyway.
That’s just too good.
As you’d guess, second law firm undercuts the “I want biggest settlement in history” guy and with a deal reached, returns from the dead and re-files their dismissed case– immediately seeking preliminary approval of the secret settlement they had negotiated behind first law firm’s back.
In the meantime, third firm—you’ll recall this was a different firm that had also been suing the Buccaneers—decides to file a suit against big shot partner and second firm with first firm paying for the litigation. Apparently first firm was pissed that big shot had stolen the case and ponied up $500,000.00 to pursue litigation against the former partner.
Face, meet cut off nose.
Meanwhile, first and third law firm successfully intervened in the settlement second law firm had reached with the Buccaneers and managed to blow up the settlement after all. Essentially making the whole lawsuit against second firm and big shot partner meaningless. But the case proceeded to the Eleventh Circuit Court of Appeals anyway…
So, if you’re keeping score at home, we have now three plaintiff’s law firms fighting each other to the circuit court of appeals over a settlement that no longer exists. Unreal.
The Buccaneers, in the meantime, presumably cannot believe their luck—they went from a $50-100MM potential liability, to a smaller dollar settlement, to no settlement at all as all the class counsel sit around fighting with each other instead of pursuing their case. Yep, luckiest NFL franchise ever.
Getting back to the actual ruling of Oppenheim, the Eleventh Circuit essentially determines that big shot partner did nothing wrong because he owed duties to the class as a whole and not just to the named class representative or his former law firm. Stating it a little different, partner didn’t “steal a case” because he continued fighting for the class and does not owe any special duties to his prior law firm or the specific named class representative he represented before.
You can only imagine how upset first law firm must be after all of this– not only did big shot partner “get away” with stealing first law firm’s case, all that money spent pursuing the action ($500k) has seemingly gone to waste–and he didn’t get his “I have the biggest TCPA settlement ever” bragging rights.
Then again, first firm appears to have succeeded in a “if I can’t have you no one can” destruction of the Buccaneer’s settlement plans, so maybe the underlying litigation will continue anew.
All I know is that TCPAWorld remains the most fascinating place on Legal Earth from my perspective. Thanks for being along for the ride.
Eric Troutman – Class Action Attorney
Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance.
He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems.
On September 16, 2018, TCPAland’s own Czar, Eric J. Troutman, and the “Kingmaker” Jeremy S. Gladstone, Assistant General Counsel and TCPA Subject Matter Expert at Capital One, spoke at the MBA’s Regulatory Compliance Conference in Washington, D.C.
It was a sight to behold. In the presentation, Eric and Jeremy distilled the utter chaos of TCPAland into three important hot topics. They discussed:
- Whether predictive dialers and dialers that call from a list still covered by the TCPA post ACA Int’l?
Hint: There are at least five schools of thought on what to do with predictive dialers following the ACA Int’l decision (ACA Int’l v. FCC, No. 15-1211, 2018 U.S. App. LEXIS 6535 at *9 (D.C. Cir. Mar. 16, 2018)). As attorneys, you should really read up on the district where your case is pending. Things vary from state to state and you cannot rely on a single “trend” with respect to predictive dialers. If you are in-house, you should tread carefully and act conservatively.
- What is new with express consent and revocation these days?
Glad you asked. A big focus here is the issue of scope of consent. For example, after the ruling in Benedetti v. Charter Communications, No.1:16-CV-2083 RLM-DLP, 2018 WL 2970998 (S.D. Ind. June 13, 2018) (Original Blog Post Here), companies need to worry about liability for violating secret limitations placed on consent. Also, beware of dual purpose calls in the event that you have consent for one purpose but not the other.
For telemarketing, express written consent is needed. Contractual consent is enforceable. However, in the absence of contractual consent or a revocation clause, consent can be revoked by any reasonable means. ACA Int’l strongly suggests that a caller can “reasonably rely” on the consent of a former subscriber for some unspecified time frame. Case law has not addressed this issue yet.
ACA Int’l also notes that imaginative means to revoke consent are likely not “reasonable.” To opt-out, a person must “clearly and expressly” request messages to stop. Thus, Opt-out evaders – in other words, people who craft wordy opt-out responses that could be construed to revoke consent but that do not explicitly revoke it – have faced a tough road lately. It is not clear what the FCC will do, if anything, to standardize revocation/opt-outs.
- What is the future of the TCPA both in terms of new suits and likely changes to the law?
We see an uptick in class litigation concerning Do Not Call (“DNC”) violations. I discussed it in detail here and I encourage you to review it. For quick reference remember: before making any calls, you must have a written DNC policy in place. And, even if you have an existing business relationship with the consumer they can opt-out of calls. You have to honor the opt-out for at least 5 years and you have to keep an internal opt-out list.
Otherwise, be patient. Post ACA Int’l, the FCC sought comments on several TCPA issues. Eric blogged about it right here. As a result, the FCC is considering and will likely rule on issues such as what constitutes an automated telephone dialing system and how the FCC should handle reassigned telephone numbers.
There is also a “Stopping Bad Robocalls Act” on the Hill. It is unclear if it will pass, but a red line version is available on TCPAland.com or by clicking here.
If you would like to learn more, here is a complete set of slides from Eric and Jeremy’s MBA presentation – they are without the witty banter, but with important case cites and tips for best businesses practices as we await the FCC’s ruling.
Finally, no one who’s ever met Eric in real life would ever question his fervor for all things TCPAland. To the rest of you, I leave you with this: In lieu of his name, Eric’s conference name tag said, “Hello my name is: Czar.” If that isn’t dedication, I don’t know what is.
Medical & Chiropractic Clinic v. David Oppenheim, et al., case number 18-13714, in the U.S. Court of Appeals for the Eleventh Circuit.
An Overview of Judicial Independence from Impeachments to Court-Packing by Hon. R. David Proctor
Counsel Owes Same Duties To Class And Rep, 11th Circ. Says
The Eleventh Circuit on Tuesday affirmed that an attorney did not run afoul of a former client and named class representative when moving between law firms that were both separately pursuing settlements in a telefax advertisement class action against the Tampa Bay Buccaneers, saying a single representative isn’t owed different considerations over the class as a whole.
The three-judge panel upheld a 2018 summary judgment made by a Florida federal court shooting down claims that former Anderson & Wanca attorney David Oppenheim breached his duties of confidentiality and loyalty as counsel to a class representative, Medical & Chiropractic Clinic Inc., when he decamped with insider knowledge to Bock Law Firm LLC, which soon after filed a separate and similar class action against the Buccaneers with a new representative, Technology Training Associates.
The circuit found arguments that the company was against its former counsel assumed the relationship between attorney and client in an ordinary case was analogous to a class action.
“One cardinal rule defines the scope of counsel’s ethical obligations in class actions: class counsel owes a duty to the class as a whole and not to any individual member of the class,” the opinion said.
The panel cited a 1981 decision in the former Fifth Circuit, which the Eleventh Circuit adopted as binding precedent. The case, Kincade v. General Tire & Rubber Co., characterized the relationship between attorney and client in a class action as “unique” and having “different ethical duties to their clients than in ordinary cases.”
Medical & Chiropractic Clinic alleged Oppenheim not only shared confidential information in a separate class action, but that a preliminary settlement reached by the Buccaneers and Bock Law Firm damaged its own negotiating position in its case against the football team.
It further sought an injunction preventing Bock Law Firm from continuing its class action settlement.
Bock Law Firm countered that it had already started down the road of a new class action against the football team and that Oppenheim was screened from involvement in the proposed class.
Bock’s separate state class action, with Technology Training Associates as the named representative, was voluntarily dismissed after Medical & Chiropractic Clinic motioned to enjoin the suit from proceeding.
But Bock mediated separately with the Buccaneers and came to a preliminary settlement that was filed in federal court for approval.
The court denied Medical & Chiropractic Clinic’s motion to intervene in the settlement, but it won on appeal in the Eleventh Circuit.
While a judge initially certified the class and approved the preliminary settlement — $19.5 million fund and $4.9 million in attorneys fees — the decision was subsequently reversed following the intervention and the case was soon after closed.
In its ruling on the present dispute, the Eleventh Circuit additionally criticized the plaintiff’s decision to file its fiduciary duty complaint in Florida state court, with the suit later moving to federal court.
Noting the separate intervention, the panel called it “wholly inappropriate” to have filed the complaint in state court given the federal court overseeing the class action has full jurisdiction over the matter.
“We are troubled by that filing. We have no hesitation in calling it what it was: a thinly veiled attempt to derail the [Technology Training Associates] settlement,” Judge Proctor said.
Attorney Phillip Bock told Law360 that they are “pleased to review the Eleventh Circuit’s thoughtful opinion. This is a win for consumers and should hopefully discourage attorneys from engaging in such conduct going forward.”
U.S. Circuit Judges Charles R. Wilson and Kevin C. Newsom, and U.S. District Court Judge R. David Proctor sat on the panel.
Medical & Chiropractic Clinic, Inc. is represented by Lauren Michelle Loew, Adam R. Alaee, Jeffrey A. Soble, Patrick Joseph McMahon and James McKee of Foley & Lardner LLP.
David M. Oppenheim is represented by Barry Blonien of Boardman & Clark LLP; Phillip A. Bock of Bock Hatch Lewis & Oppenheim LLC, and himself.
Bock Law Firm, LLC are represented in-house by Phillip A. Bock, Christopher Stephen Polaszek, Jonathan B. Piper, David M. Oppenheim and Robert M. Hatch.
Oh dear, oh dear Judge Britt Cagle Grant… https://t.co/UYPF2FNzCE #Federalist @CliffordDMay @gtconway3d @BenoitDLewis @Stanford @StanfordGSB @jawillick @wesyang @ShippersUnbound @nfergus @JoshuaGreen @lrozen @gcaw @AHoweBlogger @JiayangFan @margalitfox @NickClairmont1 https://t.co/m2kf1RllPL pic.twitter.com/zZcQ8LABWT
— LawsInTexas (@lawsintexasusa) December 7, 2020
PROCTOR, District Judge:
In 1966, the modern version of the class action rule was born. See Fed. R. Civ. P. 23. The new rule was intended to make it easier for parties to litigate complex lawsuits involving many claimants. Under that new rule, when a defendant engaged in conduct that violated the rights of others, it could find itself defending against a single class action involving hundreds or thousands of class members instead of facing hundreds or thousands of individual suits. That was in 1966. Things have continued to evolve since then.
Now, over 50 years later, when a defendant engages in questionable business practices on a widespread basis, it may not only face one class action, but several. And, when there are multiple competing class actions against a defendant, there are usually multiple lawyers competing to be appointed as class counsel. That is what occurred in this case.
Buccaneers Limited Partnership (“the Buccaneers”) does business as the Tampa Bay Buccaneers. Well before it signed Tom Brady and Rob Gronkowski to play in the 2020 football season, it was sued in at least five class action complaints.1
Each one alleged that the Buccaneers sent telefax advertisements in violation of the Telephone Consumer Protection Act (“TCPA”). 47 U.S.C. § 227.
1 Cin-Q Autos., Inc. v. Buccaneers Ltd. P’ship, No. 8:13-cv-1592-AEP (M.D. Fla.); Technology Training Assocs., Inc. v. Buccaneers Ltd. P’ship, No. 8:16-cv-1622-AEP (M.D. Fla.) (originally filed but dismissed in state court); Accounting To You, Inc. v. Buccaneers Ltd. P’ship, No. 8:13-cv-2929-AEP (M.D. Fla.); Stein, D.D.S., M.S.D., P.A. v. Buccaneers Ltd. P’ship, No. 8:13-cv-2136-AEP (M.D. Fla.); and Cinque v. Buccaneers Ltd. P’ship, No. 09-CA-21839 (Fla. Circuit Ct., Hillsborough County).
Did you know…in less than 5 years, the number of complaints against judges in the 11th Circuit has more than DOUBLED in less than 5 years?
MORE THAN DATA, IT’S YOUR CONSTITUTIONAL RIGHT TO REMOVE OUTLAWS IN ROBES FROM THE BENCH…https://t.co/Ywq38XB4Nj#WeThePeople pic.twitter.com/2tHoxohEzG
— LawsInTexas (@lawsintexasusa) December 5, 2020
Two of those class actions are relevant here.
In the first, lawyers at the firm of Anderson & Wanca (“the AW Firm”), who had previously filed suit on behalf of a different plaintiff, added another class action representative, Medical & Chiropractic Clinic, Inc. (“M&C”). A mediation was conducted but it was unsuccessful.
Shortly after it concluded, David Oppenheim, an attorney at the AW Firm who was principally involved in the mediation, jumped ship to join the Bock Law Firm, LLC (“the Bock Firm”).
Within a month of Oppenheim’s departure from the AW Firm, the Bock Firm filed a separate class action against the Buccaneers raising the same TCPA claims. And, within two months of filing the second class action, the Bock Firm reached a proposed settlement with the Buccaneers.
M&C and its attorneys were not happy.
Brian Wanca, a principal at the AW Firm, encouraged M&C to sue the Bock Firm in state court and allege they had breached fiduciary duties owed to it as a named class representative.
M&C and its counsel claimed Oppenheim gave attorneys at the Bock Firm confidential information about settlement negotiations in the AW Firm’s class action, which assisted the Bock Firm in settling their class action quickly and to the detriment of the class.
After the case was removed, the parties filed cross-motions for summary judgment.
The district court concluded that Oppenheim and the Bock Firm did not violate any fiduciary duty and, in any event, no damages resulted from any such breach. Therefore, the district court granted summary judgment in favor of Oppenheim and the Bock Firm.
This appeal followed.
M&C and Wanca argue the district court erred in granting summary judgment.
We disagree.
In explaining our decision, we are required to address a unique question:
Does class counsel owe a duty of loyalty and confidentiality to a named class representative that is distinct from the duty owed to the putative class?
We conclude, consistent with our precedent, that the duties owed to a class representative do not differ from the duties owed to a class.
We also take this opportunity to clarify the duties owed by class counsel in class actions generally and in the context of this case specifically.
And, we determine that in filing this action M&C and Wanca launched an impermissible collateral attack on the Bock Firm’s attempt to certify and settle a class action.
Their assertions should have been made only before the court that was exercising jurisdiction over the Rule 23 putative class action — the court in which the request to certify a settlement class and approve the settlement was made.
I. Background
Because, as we have noted above, the fiduciary duty claims in this case are intertwined with two previously-referenced class actions (and Oppenheim’s successive employment at the two of the law firms that worked on those actions), we begin our discussion with a more fulsome description of those cases and Oppenheim’s move from the AW Firm to the Bock Firm.
The Cin-Q Class Action
In June 2013, Cin-Q Autos, Inc. filed a putative class action against the Buccaneers for alleged TCPA violations.
Cin-Q Autos, Inc. v. Buccaneers Ltd. P’ship, No. 8:13-cv-1592-AEP (M.D. Fla), (Doc. # 1) (“Cin-Q”).
The original Cin- Q complaint was filed by Michael Addison of the Addison & Howard firm and Wanca and Ryan Kelly of the AW Firm.
M&C was not an original plaintiff in that class-action complaint but was later joined in the Cin-Q class action as one of several named class representatives.
Like other plaintiffs in Cin-Q, M&C is primarily represented by the AW Firm.
Although the AW Firm was a major player in litigating the Cin-Q class action, Oppenheim played a relatively minor role during much of that litigation.
But, that changed after the parties agreed to mediate. Addison and Wanca retained final authority over whether to accept any settlement offer, but the record indicates that Oppenheim took over the role of “closer.”2
Toppin’ the Sunday Charts on LIT #4; Big Law Goodwin’s Hall of Shame: https://t.co/PqK8iplgFo @lopezlinette @brithume @ggreenwald @John_Kass @RealRLimbaugh @DavidMDrucker @ccpecknold @sgurman @MattHennessey @baseballcrank @HappyWarriorP @OmarJimenez @BlueBoxDave @MiaCathell
— LawsInTexas (@lawsintexasusa) November 22, 2020
2 The record is unclear as to whether Oppenheim took over an increased role when the parties began mediating or whether his larger role only occurred with regard to the mediation before Judge Anderson (there were several rounds of mediation).
However, the record is more clear on this point: during the course of those negotiations, Oppenheim never received any information that was proprietary, unique, or specific to M&C.
In fact, Oppenheim’s only Cin-Q-related communications with M&C occurred at dinner the night before the mediation and the next day during the mediation.
Mediating Cin-Q proved difficult because Wanca wanted a larger settlement than the Buccaneers were willing to pay.
Wanca refused to settle for less than a $99,000,000 “settlement fund” and a $24,750,000 attorney fee (25% of the settlement fund).3
When talks stalled, Addison suggested the parties negotiate the fund in a bracket between $10,000,000 and $50,000,000.
Wanca was less than enthusiastic and responded, “I am NOT going down to $50 million on this case.”
Mediation failed soon thereafter, and the Cin-Q plaintiffs moved for class certification.
That publicly-filed motion included an expert report by Robert Biggerstaff (“the Biggerstaff Report”), which listed the telephone numbers used by the Buccaneers in sending the fax advertisements. Cin-Q, No. 8:13-cv-1592-AEP, (Docs. # 207-5; 207-6).
B. Oppenheim’s Move from the AW Firm to the Bock Firm
A week after the Cin-Q plaintiffs moved for class certification, Phillip Bock recruited Oppenheim to leave the AW Firm and join the Bock Firm.
Bock and Oppenheim met on April 3, 2016, to work out the details.
At that time, they did not discuss the Cin-Q case or any of the other class actions filed against the Buccaneers.
Four days after meeting with Bock, Oppenheim gave notice to the AW Firm that he had accepted employment with the Bock Firm.
3 The TCPA allows recovery of actual monetary loss or statutory damages of $500 per telefax, whichever is greater. 47 U.S.C. § 227(b)(3)(B).
The parties negotiated on the basis of a virtual “settlement fund” against which class members could make claims, with any unclaimed monies reverting to Buccaneers.
With approximately 343,000 faxes at issue, Buccaneers’ total estimated potential exposure was $170,000,000. But the parties estimated that the claims rate would be no more than ten per cent (10%) of the fund.
So many lies https://t.co/ytvgidmASz @RepColinAllred @JodeyArrington @RepBrianBabin @RepKevinBrady @JudgeJohnCarter @JoaquinCastrotx @RepSpeier @RepCloudTX @ConawayTX11 @JohnCornyn @RepDanCrenshaw @CuellarCampaign @RepFletcher @RepKayGranger @ewarren @Law360 @TexasLawyer @NBCNews https://t.co/bbrgKAowPa pic.twitter.com/77of0ZNOu8
— LawsInTexas (@lawsintexasusa) December 3, 2020
When Oppenheim left the AW Firm, he believed that he and Wanca would continue to work together amicably on cases jointly handled by the Bock Firm and the AW Firm.4 As it turns out, Oppenheim was wrong.
Oppenheim’s departure from the AW Firm was the catalyst that set the stage for this lawsuit. Before leaving, Oppenheim copied the hard drive on his AW Firm computer to the computer he planned to use at the Bock Firm. The hard drive contained briefs, pleadings, and other documents he had worked on at the Bock Firm along with a year’s worth of his e-mails.
But, most important to this appeal, Wanca complains that within weeks of beginning at the Bock Firm, Oppenheim shared inside knowledge of the Cin-Q litigation with Bock. Bock had e-mailed Oppenheim to ask why Wanca had rejected Judge Anderson’s proposal in another mediation involving the AW Firm and the Bock Firm. Oppenheim responded that Wanca likely rejected the proposal because he “doesn’t like how the Tampa Bay Bucs mediation process went and resents Andersen’s continued efforts [in that case].” Oppenheim later elaborated, “Yeah. [Wanca] wants to set a record above the Capital One $75 million settlement.
4 The Bock Firm and the AW Firm had previously appeared together in dozens of TCPA class actions.
Indeed, before 2009, Wanca and Bock, the two firms’ principals, agreed to prosecute all of their TCPA class actions jointly.
And, although Wanca decided to stop partnering with the Bock Firm with regard to new cases, the firms planned to remain co-counsel on previously-filed, pending cases.
The magistrate judge it’s in front of is squeamish and is giving the Defendants a broad shot at disproving [vicarious liability]. Sort of like Sarris.”5 At the end of this exchange, Bock remarked, “[Buccaneers’ counsel] is a settler.” Oppenheim replied, “That was Andersen’s read.”
C. The TTA State and Federal Class Actions
Before hiring Oppenheim, the Bock Firm conducted several mail-marketing campaigns to identify potential plaintiffs for future TCPA class actions. Some of the recipients of those communications — including Technology Training Associates (“TTA”) — already had expressed interest in pursuing TCPA claims before Oppenheim moved to the Bock Firm. By cross-referencing those that responded to their marketing efforts with the names listed on the Biggerstaff Report, the Bock Firm was prepared to file a TCPA class action against the Buccaneers to compete with the AW Firm’s efforts in Cin-Q.
About a month after hiring Oppenheim and two weeks after Oppenheim’s email exchange with Bock, the Bock Firm filed a class action in a Florida state court against the Buccaneers. Technology Training Assocs., Inc. v. Buccaneers Ltd. P’ship, No. 16-CA-4333 (Fla. Cir. Ct.) (Doc. 1) (“the TTA state class action”).
5 Oppenheim was apparently referring to a TCPA case in which a district court granted summary judgment to defendants, in part, because of its determination that plaintiffs failed to establish liability under an agency theory.
See Palm Beach Golf Center-Boca, Inc. v. Sarris, 981 Supp. 2d 1239, 1253 (S.D. Fla. 2013).
A panel of this court later reversed and remanded.
See Palm Beach Golf Center-Boca, Inc. v. Sarris, 781 F.3d 1245, 1257-58 (11th Cir. 2015).
Like the Cin-Q class action, the TTA state class action alleged TCPA claims against the Buccaneers. Although the Bock Firm represented the named plaintiffs and putative class in the TTA state class action, the firm screened Oppenheim from any involvement.
Soon after the Bock Firm filed the TTA state class action, the Buccaneers filed a Notice of Pendency of Related Action in the Cin-Q case, which disclosed the existence of the TTA state class action to the Cin-Q plaintiffs. The turf war began. The Cin-Q plaintiffs moved to intervene in the TTA state class action and, in Cin-Q, filed a Motion to Enjoin Defendant from Proceeding in a Competing Case. The Bock Firm responded by voluntarily dismissing the TTA state class action. However, though the Bock Firm dismissed the TTA state class action, the firm began mediating with the Buccaneers. And, in June 2016, the Bock Firm reached a proposed settlement with the Buccaneers.6
The Bock Firm refiled this class action complaint in federal court and immediately sought preliminary approval of the class settlement. Technology Training Assocs., Inc. v. Buccaneers Ltd. P’ship, No. 8:16-cv-1622-AEP (M.D. Fla.) (Docs. # 1, 18). M&C and Cin-Q, both plaintiffs in the Cin-Q action, moved to intervene in the now federal TTA action. The district court denied the motion and granted preliminary approval of the class settlement.
6 Under the terms of the settlement agreement, the Buccaneers agreed to create a $19.5 million settlement fund and pay the Bock Law Firm $4,875,000 in attorneys’ fees.
Oh look, a review of a dismissed Judicial complaint has made it onto the 5th Circuit website by https://t.co/tgOgch6hNI on Wed. Dec., 2. But alas, that’s it. Not even the Burkes Nov. 10 dismissed complaint has been posted yet. https://t.co/55svhEvMYR
— LawsInTexas (@lawsintexasusa) December 6, 2020
On interlocutory appeal, however, this court reversed the district court’s decision on the motion to intervene before remanding the case for further proceedings. Tech. Training Assocs., Inc. v. Buccaneers Ltd. P’ship, 874 F.3d 692, 697 (11th Cir. 2017). That decision allowed M&C and Cin-Q to intervene in the federal TTA case to protect their interests.
D. The Filing of this Case and the Subsequent Conclusion of the TTA
Federal Case
On June 1, 2016, less than two weeks before the Buccaneers filed for preliminary approval of the settlement in the federal TTA case, M&C filed this breach of fiduciary duty suit against Oppenheim and the Bock Firm in Florida state court.
M&C alleged that Oppenheim breached the fiduciary duties owed to it as a named class representative—specifically the duties of loyalty and confidentiality.
The complaint also asserted that the Bock Firm aided and abetted Oppenheim in the breach.
M&C sought money damages, attorney’s fees, and (quite oddly) an injunction preventing the Bock Firm from representing clients in the TTA action or reaching a settlement in any matter substantially related to the Cin-Q action.
To be clear, M&C agreed to pursue fiduciary breach litigation, but Wanca promised to pay all of their fees and expenses in doing so. He did so because he thought the Bock Firm and Oppenheim had stolen “his” case. The record indicates Wanca and the AW Firm have spent over $500,000 financing this action.
Oppenheim and the Bock Firm removed the case to the Middle District of Florida, and the parties filed cross motions for summary judgment.
The district court found (1) that Oppenheim did not owe an individual fiduciary duty to M&C, (2) that even assuming such a duty existed, M&C failed to show Oppenheim or the Bock Firm breached that duty, and (3) that, in any event, M&C failed to prove damages.
Consistent with these findings, the district court granted Oppenheim’s and the Bock Firm’s motion for summary judgment, denied M&C’s motion for summary judgment, and entered judgment in favor of Oppenheim and the Bock Firm. M&C appealed.
Soon after filing this appeal, the Cin-Q intervenors (including M&C) in the federal TTA action filed a renewed motion to decertify the settlement class. TTA, No. 8:16-cv-01622-AEP, (Doc. # 131).
The court in that action granted the motion and decertified the TTA class under Rule 23(a)(4), after finding that (1) class counsel in the federal TTA action may have undercut Cin-Q’s counsel’s negotiating position and (2) unlike the plaintiffs in Cin-Q, the TTA plaintiffs’ claims were potentially barred by the statute of limitations. Id., (Doc. # 169).
Although the federal TTA action is now decertified, this appeal remains.
II. Standard of Review
We review a district court’s order granting summary judgment de novo. Jones v. UPS Ground Freight, 683 F.3d 1283, 1291 (11th Cir. 2012). Summary judgment is appropriate where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). We “tak[e] all of the facts in the record and draw[] all reasonable inferences in the light most favorable to the non-moving party.” Peppers v. Cobb Cty., 835 F.3d 1289, 1295 (11th Cir. 2016) (citations omitted).
III. Analysis
M&C asserts the district court erred in finding (1) Oppenheim did not owe an individual fiduciary duty to M&C separate from the duty owed to the class and M&C failed to prove damages resulting from Oppenheim’s breach.
We agree with the district court on both counts and take this opportunity to clarify class counsel’s fiduciary obligations in this unique context.
A federal court sitting in diversity jurisdiction applies the substantive law of the forum state (in this case, Florida) alongside federal procedural law. Global Quest, LLC v. Horizon Yachts, Inc., 849 F.3d 1022, 1027 (11th Cir. 2017).
M&C claims that Oppenheim violated a fiduciary duty owed to it and that the Bock Firm aided and abetted that violation.
So, we turn to Florida law to evaluate the merits of those claims. We note that to establish a breach of fiduciary duty under Florida law, a plaintiff must prove three elements: the existence of a fiduciary duty, a breach of that duty, and that the plaintiff’s damages were proximately caused by the breach. Gracey v. Eaker, 837 So.2d 348, 353 (Fla. 2002).
Further, to prove aiding and abetting a breach of fiduciary duty, a plaintiff must show: “(1) a fiduciary duty on the part of the primary wrongdoer, (2) a breach of this fiduciary duty, (3) knowledge of the breach by the alleged aider and abettor, and (4) the aider and abettor’s substantial assistance or encouragement of the wrongdoing.” AmeriFirst Bank v. Bomar, 757 F. Supp. 1365, 1380 (S.D. Fla. 1991).
We begin by examining the fiduciary obligations owed by counsel in class action litigation.
A. Duty
The parties all agree that, as putative class counsel, Oppenheim owed fiduciary duties to the class as a whole. But, that is not the issue we must address. M&C does not argue (at least in this case) that Oppenheim violated a duty owed to the class.
Rather, M&C and Wanca assert that Oppenheim owed a heightened fiduciary duty to M&C as a putative class representative.
Therefore, in evaluating this claim, we must first determine whether class counsel owes a fiduciary duty to class representatives that is distinct from the fiduciary duty owed to the class. We conclude class counsel does not.
M&C offers a simple syllogism to explain why class counsel owes a separate and heightened fiduciary duty to class representatives: (1) if all attorney-client relationships create duties of loyalty and confidentiality and (2) if class counsel’s representation of class representatives (but of not the rest of the class) creates an attorney-client relationship, then it follows that (3) class counsel’s representation of class representatives creates duties of loyalty and confidentiality separate from the duties owed to the class. However, this syllogism breaks down under proper scrutiny.
As support for its assertion that all attorney-client relationships create duties of loyalty and confidentiality, M&C cites to Florida case law and the Florida Rules of Professional Conduct (“Florida Rules”).7
See Fla. Bar v. Padgett, 481 So.2d 919, 919 (Fla. 1986) (“Attorneys owe a fiduciary duty to their clients….”); Florida Rules 4-1.9(c) (stating that a lawyer who has formerly represented a client may not afterwards “reveal information relating to the representation except as these rules would permit or require with respect to a client”).
Of course, M&C is correct that Florida courts, interpreting the Florida Rules, have found that attorneys generally owe duties of confidentiality and loyalty to former clients.
See, e.g., Tambourine Comercio Int’l S.A. v. Solowsky, No. 06-20682-Civ, 2007 WL 689466, at *29 (S.D. Fla. Mar. 4, 2007) (“Florida courts have recognized that an attorney owes both a duty of confidentiality and a duty of loyalty to former clients with respect to matters that are substantially related.”).
For example, it is obviously impermissible for a lawyer to misuse a client’s funds or to represent adverse parties in substantially related matters.
See Fla. Bar v. Bailey, 803 So.2d 683, 694 (Fla. 2001) (“[Counsel]’s self-dealing constitutes a complete abdication of his duty of loyalty to his client.”); Estright v. Bay Point Improvement Ass’n, Inc., 921 So.2d 810, 811 (Fla. 1st DCA 2006) (concluding trial court correctly disqualified petitioners’ attorney because petitioners’ attorney represented adverse parties in substantially related matters).
M&C, however, fails to point to any class action-specific authority extending duties of loyalty or confidentiality to an attorney’s representation of a class representative in a class action.8
And this is where M&C’s syllogism breaks down. M&C relies heavily on rules and decisions from outside the class action context. But class actions, wherein lawyers represent absent parties, involve different considerations than cases in which counsel is actually retained by a client (or multiple clients).
7 The Preamble to the Florida Rules, however, states: “[The Florida Rules] are not designed to be a basis for civil liability.” R. Regulating Fla. Bar 4, Preamble.
8 M&C cites two district court cases for the proposition that an attorney-client relationship exists between class counsel and class representatives that is distinct from that between class counsel and the class.
However, we are not persuaded by either decision.
First, neither decision cited by M&C applies the Florida Rules. See In re Katrina Canal Breaches Consol. Litig., No. 05-4182, 2008 WL 4401970 (E.D. La. Sept. 22, 2008); Morisky v. Pub. Serv. Elec. & Gas Co., 191 F.R.D. 419 (D. N.J. 2000).
Second, both decisions addressed the narrow issue of whether class counsel could assert privileges with respect to absent class member before class certification—not the scope of class counsel’s duty to the class versus the named class representatives.
See In re Katrina Canal Breaches Consol. Litig., 2008 WL 4401970, at *2-3 (holding class counsel cannot prevent defendants from contacting absent class members before class certification); Morisky, 191 F.R.D. at 424 (holding that the attorney-client privilege is inapplicable to communications with absent class members).
Oh dear, oh dear Judge Britt Cagle Grant… https://t.co/UYPF2FNzCE #Federalist @CliffordDMay @gtconway3d @BenoitDLewis @Stanford @StanfordGSB @jawillick @wesyang @ShippersUnbound @nfergus @JoshuaGreen @lrozen @gcaw @AHoweBlogger @JiayangFan @margalitfox @NickClairmont1 https://t.co/m2kf1RllPL pic.twitter.com/zZcQ8LABWT
— LawsInTexas (@lawsintexasusa) December 7, 2020
In Kincade v. General Tire & Rubber Co., 635 F.2d 501 (5th Cir. 1981), the former Fifth Circuit, in a decision still binding on us,9 dealt with the ethical quandaries specific to class actions.
The Kincade court determined that attorney- client relationships in class actions are “unique” because (1) “the ‘client’ in a class action consists of numerous unnamed class members as well as the class representatives” and (2) “the class itself often speaks in several voices.” Id. at 508 (quoting Pettway American Cast Iron Pipe Co., 576 F.2d 1157, 1216 (5th Cir. 1978)).
Because of this unique attorney-client relationship, the Kincade court determined counsel in class actions have different ethical duties to their clients than in ordinary cases. As an illustration of that difference, the Kincade court decided that cases “holding that an attorney cannot settle his individual client’s case without the authorization of the client are simply inapplicable” to class actions. Kincade, 635 F.2d at 508.
What, then, determines the scope of class counsel’s ethical duties?
One cardinal rule defines the scope of counsel’s ethical obligations in class actions: class counsel owes a duty to the class as a whole and not to any individual member of the class.10
Applying this rule, courts like Kincade have rejected attempts by class members to derail settlements beneficial to the class. See Kincade, 635 F.2d at 508.
9 In Bonner v. City of Prichard, 661 F.2d 1206, 1207 (11th Cir. 1981), the en banc Eleventh Circuit adopted as binding precedent all decisions of the former Fifth Circuit handed down before October 1, 1981.
10 As one of our sister circuits has recognized, however, defining the outer parameters of these duties can be difficult. See Zimmer Paper Prod., Inc. v. Berger & Montague, P.C., 758 F.2d 86, 91 (3d Cir. 1985) (“The bounds of fiduciary duty are undoubtedly not easy to define.”). But, this case simply does not involve the outer parameters of the duties owed by class counsel to the class.
But, an important corollary stems from this principle: class counsel does not owe a particular duty to any group comprised of class members, such as class representatives, distinct from the duty owed to the class.
See Parker v. Anderson, 667 F.2d 1204, 1211 (5th Cir. 1982) (holding the duty of counsel in the class-action context “is to the entire class and is not dependent on the special desires of the named plaintiffs”).
To hold otherwise would threaten one of the defining purposes of class actions—the consolidation of claims into one suit where a class of plaintiffs may speak with one voice.
See Pettway, 576 F.2d at 1176 (“The interests of the named plaintiffs and those of other class members may diverge, and a core requirement for preventing abuse of the class action device is some means of ensuring that the interests and rights of each class member receive consideration by the court.”).
If courts required class counsel to give special ethical considerations to class representatives (or any other subset of the class), the remaining class members would necessarily receive reduced ethical considerations in comparison.
And, in cases where the interests of the class representative diverge from the interests of class members, class counsel would be required to choose the interests of some class members over the rest of the class.
Such outcomes could splinter class actions, lead to costly litigation between class members, and encourage class members to opt-out.
By deciding that Oppenheim did not owe a heightened duty to M&C because of its status as a class representative, the district court faithfully followed the case law adopted by our circuit as set forth in Kincade.
Furthermore, the district court did not err when it rejected M&C’s request that it apply the Florida Rules to Oppenheim’s behavior.
The Florida Rules are intended to instruct attorneys in the representation of clients outside of the class action context and are “simply inapplicable” to this case. Kincade, 635 F.2d at 508.
The precedent of our circuit implicitly (if not explicitly) warned the district court not to apply such ethical rules to class counsel.
Pettway, 576 F.2d at 1176 (“Certainly it is inappropriate to import the traditional understanding of the attorney-client relationship into the class action context by simply substituting the named plaintiffs as the client.”).
The absence of a traditional attorney-client relationship between Oppenheim and M&C, the unique relationship between class counsel and class representatives, and application of our Kincade precedent all lead us to affirm the district court’s ruling.
However, we are obliged to make one additional observation. M&C’s filing of this suit in state court against Oppenheim and the Bock Firm strikes us as an attempt to end run around the TTA court, which was solely responsible for making all Rule 23 determinations related to the Bock Firm’s requests to certify a class and approve a class settlement.
Rule 23 makes clear that the district court in which a class action is filed operates as a gatekeeper.
It is that court, and that court alone, that has the task of deciding a number of Rule 23 questions, including whether to certify a class, whether to appoint class counsel, and whether to approve a proposed class settlement.
We are aware that, separate and apart from filing this action, M&C and Wanca objected to the TTA settlement and attempted to intervene in the TTA action.11
And, although the TTA court preliminarily approved the settlement, ultimately that court reversed course and decertified the class.
But, that was not until well after M&C and Wanca filed this action in state court.
We are troubled by that filing. We have no hesitation in calling it what it was: a thinly-veiled attempt to derail the TTA settlement.12
That is clear because of certain aspects of the relief sought in this action.
11 The district court denied the Cin-Q plaintiff’s motion to intervene ruling that the “Cin- Q plaintiffs may assert [their] objections in the normal course of these proceedings, as anticipated by Rule 23.” TTA, No. 8:16-cv-01622-AEP (Docs. # 56).
It also preliminarily approved the settlement. A panel of this court reversed the decision to deny the intervention motion. Tech Training Assocs., Inc. v. Buccaneers Ltd. P’ship, 874 F.3d 692 (11th Cir. 2017).
And after remand, the objections asserted by the AW Firm proved successful as the TTA settlement failed after the district court granted a motion filed by the AW Firm (on behalf of the Cin-Q plaintiffs) to decertify the TTA settlement class. TTA, No. 8:16-cv-1622-AEP (Docs. # 131, 169).
12 To the extent that Wanca and the AW Firm protest that they filed this action to protect the interests of the class and M&C, we firmly remind them that a class’s interests are due to be protected in a manner consistent with Rule 23—that is, by filing an objection in the federal court where the class action resides and any class settlement is proposed.
Oh, and then there’s this story from a Texas https://t.co/7dpyf1Q5HQ meeting in 2019, recanting San Antonio Lawyer Mikal Watts “demand letter” about the 13th COA @kaibernierchen @Legal_Times @CFCJ_FCJC @MottFoundation @justice_2030 @FridaGhitis @johnson_carrie @SupremeCourt_TX https://t.co/NoqAtK2Czn pic.twitter.com/opuUTQbZuO
— LawsInTexas (@lawsintexasusa) December 7, 2020
M&C claimed not only money damages and attorneys’ fees, but it also requested an injunction preventing the Bock Firm from proceeding as class counsel in the TTA action or settling that action. So, in filing this suit, M&C and its counsel asked a state court judge to enjoin putative class counsel in a separate federal class action. As the saying goes, that won’t work. There is only one gatekeeper under Rule 23 and it was wholly inappropriate for M&C and its counsel to go to state court in an attempt to employ another one.
M&C and Wanca may contend that their substantive objections were valid.
After all, once M&C was permitted to intervene, the district court eventually decertified the class and rejected the settlement. But, that is precisely the point. It is emphatically the role of the district court to address those matters, for it is the only forum in which such a challenge should have been launched—certainly not a different court. So, regardless of the merits of the objections, M&C crossed a line by attempting to litigate them in another court.
For these reasons, we affirm the district court’s holding that M&C failed to prove the first element of both of its claims, i.e., that Oppenheim owed a fiduciary duty to M&C separate from the fiduciary duty he owed to the class.
B. Damages
In the alternative, the district court determined that M&C failed to show it suffered damages as a result Oppenheim’s alleged fiduciary breach. We also agree with that ruling.
M&C argues that it was harmed by Oppenheim’s and the Bock Firm’s conduct. It contends that, “[b]ut for Oppenheim’s sharing of confidential and mediation privileged information with [the Bock Firm], [the Bock Firm] would not have filed the TTA State Court and Federal Actions.” As a result of the Bock Firm filing the TTA federal action, M&C claims it was injured by having its position as putative class representative usurped and by being “forced to expend time and other resources to prevent an improper settlement between [the Bock Firm] and the Buccaneers resulting from [the Bock Firm] and the Buccaneer’s aligned interests.” M&C asserts these injuries occurred only because the TTA federal action settled for an artificially and improperly low amount due to the Bock Firm’s rush to undercut the AW Firm’s settlement efforts in the Cin-Q action.13
But, M&C’s theory of damages in this case necessarily relies on it proving that the proposed TTA settlement was to the detriment of the class. As we noted above, the proper forum to raise that objection was in the federal TTA action.
13 This scenario is sometimes referred to as a “reverse auction.” See, e.g., Lipuma v. American Express Co., 406 F. Supp. 2d 1298, 1305 (S.D. Fla. 2005).
Our observations about M&C’s attempt to circumvent the TTA court’s handling of the class action before it are equally applicable here. Rule 23 provides class members and objectors like M&C with procedural mechanisms to file these types of challenges.
And, Rule 23 squarely places the responsibility for ruling on such challenges in the district court that has jurisdiction over the class action claims, not a state court.
Again, in accordance with Rule 23, it is the district court — and only the district court — that is tasked with making determinations about class certification, class counsel, and class settlements. See Reynolds v. Beneficial Nat. Bank, 288 F.3d 277, 280 (7th Cir. 2002) (stating that, in the context of approving or disapproving a class settlement, some courts “have gone so far as to term the district judge in the settlement phase of a class action suit a fiduciary of the class”).
Neither a lone putative class member, a competing putative class representative such as M&C,14 nor competing putative class counsel, such as Wanca and the AW Firm, may circumvent the district court’s Rule 23 role by launching a collateral attack in another court against class counsel.
For these reasons, any objections to the federal TTA settlement, or any claim that the TTA settlement somehow injured M&C, should have been raised before the court in the federal TTA case in accordance with Rule 23.
The district court did not permit M&C to circumvent the TTA judicial officer and the text of Rule 23. We will not either.
We find no error in the district court’s determination that M&C failed to establish that it was damaged by any alleged breach of a fiduciary duty owed to it by Oppenheim.
IV. Conclusion
For all these reasons, we affirm the district court’s grant of summary judgment in favor of Oppenheim and Bock Law Firm.
AFFIRMED.
14 As part of its claim for monetary damages, M&C also sought to recover the loss of its incentive award in the Cin-Q class action.
However, a panel of this court recently concluded that such service awards are foreclosed by Supreme Court precedent.
See Johnson v. NPAS Solutions, LLC, 975 F.3d 1244, 1260 (11th Cir. 2020) (en banc petition pending).
Ken Paxton. A Thief. A Liar. That’s Texas through and through. https://t.co/mjDEggRqhs @AngelaPaxtonTX @SupremeCourt_TX @SCOTUSblog @tedcruz @statebaroftexas @StateBarofGA @GACourts @VAStateBar @DC_Bar @LDADemocracy @ewarren @SenWhitehouse @SenSherrodBrown @senatemajldr #txlege pic.twitter.com/XWyuL1XDo7
— LawsInTexas (@lawsintexasusa) December 7, 2020
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Appellate Judges
The Eleventh Circuit Issues Another Glossed Opinion to Dismiss a Pro Se Lawyer’s Appeal
All motions under Rule 60(b) OTHER THAN those based on Rule 60(b)(4) must be made within a reasonable time.
Henry v. City of Mount Dora, No. 21-14120 (11th Cir. Sep. 16, 2022)
REPUBLISHED BY LIT: SEP 17, 2022
Before LUCK, LAGOA, and ANDERSON, Circuit Judges. PER CURIAM:
Marie Henry, proceeding pro se, appeals the district court’s denial of her Federal Rule of Civil Procedure 60(b)(4), (d)(3) motion seeking relief from the court’s order dismissing her federal claims raised pursuant to several federal statutes, and remanding to state court her state law claims raised pursuant to Florida state law.
After filing an ethics complaint against one of the defendants and a pro se motion to disqualify a judge in a predatory lending case, Henry was referred to a Florida Bar grievance committee on two counts of misconduct and, after disciplinary proceedings that she challenged as defective, she was suspended for 6 months.
She originally filed her complaint in Florida state court, but the Florida Bar removed her case to the United States District Court for the Middle District of Florida.
On appeal, she argues, first, that the district court erred by denying her Rule 60 motion as untimely.
Second, she contends that the court abridged her due process right to an impartial tribunal, notice, and an opportunity to be heard by dismissing her federal claims where the defendants did not unanimously consent to removal, the court judicially noticed facts without a hearing, and the judge was a member of an adverse party.
Third, she asserts that the court erred by failing to analyze fraud on the court.
Finally, she argues that the court’s denial of an extension to file objections to a magistrate judge’s report and recommendation violated 28 U.S.C. § 2072.
I.
LIT OBJECTS TO THE PANEL SUMMARY, WHICH DOES NOT PROVIDE DATES FOR THE FLORIDA BAR SUSPENSION, WHICH WAS IN MARCH 2015 , AND GLOSSES OVER THE FACT IT TOOK THE BAR YEARS TO PROSECUTE AND REACH ITS FINAL DISPOSITION.
A Federal Notice of Appeal is Not Limited to 30 Days, that’s a Judicial Rule Subordinate to Statute https://t.co/gyXvQ7Ha1Z
— lawsinusa (@lawsinusa) September 17, 2022
We review de novo the denial of a motion to set aside a judg-ment for voidness under Rule 60(b)(4).
Stansell v. Revolutionary Armed Forces of Colom., 771 F.3d 713, 736 (11th Cir. 2014).
Motions pursuant to Rule 60(b)(4) are not subject to a reasonable timeliness requirement or a typical laches analysis.
Id. at 737-38.
But “Rule 60(b)(4) does not provide a license for litigants to sleep on their rights.”
United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 275 (2010).
When considering whether a movant slept on her rights, we have noted that subject matter jurisdiction cannot be waived and have addressed the merits of the movant’s jurisdictional argument.
See Stansell, 771 F.3d at 737
(holding that movant waived “his right to object to any defects in the service of process or to any denial of his right to be heard” because he “sat on his rights for nine months” but addressing alleged jurisdiction issues).
We may affirm for any reason supported by the record.
Bircoll v. Miami-Dade Cnty., 480 F.3d 1072, 1088 n.21 (11th Cir. 2007).
Here, the district court applied a reasonable time requirement to Henry’s Rule 60(b)(4) motion, but that requirement was inappropriate.
See Stansell, 771 F.3d at 737.
However, Henry sat on her rights by waiting more than 2 years to file her Rule 60(b)(4) motion.
See id. at 737-38.
Thus, we affirm the district court as to any issues raised by Henry that do not relate to subject matter jurisdiction because she slept on her rights for over two years.
Bircoll, 480 F.3d at 1088 n.21.
Like in Stansell, however, we next consider Henry’s arguments that the district court lacked subject matter jurisdiction.
See Stansell, 771 F.3d at 737.
LIT DISAGREES WITH THE PANEL OPINION WHICH CONTRADICTS ITSELF AND THIS COURT’s OWN RULINGS TO RELY UPON A SCOTUS BANKRUPTCY CASE, WHICH IS INAPPOSITE TO THE FACTS HERE.
FURTHERMORE, THE CITE, WHEN READ FULLY, IS NOT ABOUT DELAY IN APPEALING AT ALL:
“United had actual notice of the filing of Espinosa’s plan, its contents, and the Bankruptcy Court’s subsequent confirmation of the plan. In addition, United filed a proof of claim regarding Espinosa’s student loan debt, thereby submitting itself to the Bankruptcy Court’s jurisdiction with respect to that claim…. United therefore forfeited its arguments regarding the validity of service or the adequacy of the Bankruptcy Court’s procedures by failing to raise a timely objection in that court.“
United Student Aid Funds v. Espinosa, 559 U.S. 260, 275 (2010)
—————
Before HULL, MARCUS and WILSON, Circuit Judges.:
“All motions under Rule 60(b) other than those based on Rule 60(b)(4) must be made within a reasonable time. See Fed. R. Civ. P. 60(c). ” Sec. & Exch. Comm’n v. J&J Mgmt. Consulting, No. 15-14628, at *4 (11th Cir. Oct. 3, 2016)
II.
Federal Rule of Civil Procedure 60(b)(4) provides relief from a final judgment or order if the judgment is void.
Fed. R. Civ. P. 60(b)(4).
A judgment is not void under Rule 60(b)(4) merely because it was erroneous.
Espinosa, 559 U.S. at 270.
Generally, it is void solely if it is premised on a jurisdictional error depriving the court of even arguable jurisdiction or on a due process violation that deprived a party of notice or the opportunity to be heard.
See id. at 271.
Federal courts always have jurisdiction to determine their own jurisdiction.
In re Nica Holdings, Inc., 810 F.3d 781, 789 (11th Cir. 2015).
The Rooker-Feldman1 doctrine is a narrow jurisdictional doctrine concerning a court’s subject matter jurisdiction that bars parties who lose a case in state court from appealing their loss in a federal district court.
Behr v. Campbell, 8 F.4th 1206, 1208 (11th Cir. 2021);
Alvarez v. Att’y Gen for Fla., 679 F.3d 1257, 1264 (11th Cir. 2012).
Neither res judicata nor the requirement that all defendants consent to removal is jurisdictional.
See Narey v. Dean, 32 F.3d 1521, 1524-25 (11th Cir. 1994);
In re Bethesda Mem’l Hosp., Inc., 123 F.3d 1407, 1410 n.2 (11th Cir. 1997).
An appellant abandons any argument not briefed before us, made in passing, or raised briefly without supporting arguments or authority.
Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1330 (11th Cir. 2004);
Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 681 (11th Cir. 2014).
We can consider sua sponte an abandoned issue if a forfeiture exception applies and extraordinary circumstances warrant review.
United States v. Campbell, 26 F.4th 860, 873 (11th Cir. 2022) (en banc), petition for cert. filed (U.S. May 17, 2022) (No. 21-1468).
Here, Henry was not entitled to relief pursuant to her Rule 60(b)(4) motion because she did not identify any jurisdictional defect depriving the district court of arguable jurisdiction.
See Espinosa, 559 U.S. at 271.
The requirement that all defendants consent to removal is not jurisdictional.
See In re Bethesda Mem’l Hosp., Inc., 123 F.3d at 1410 n.2.
Res judicata is not jurisdictional either.
Narey, 32 F.3d at 1524–25.
Moreover, to the extent Henry argues that the district court erred by concluding the Rooker-Feldman doctrine applied, that is an argument over which the court had jurisdiction because a court always has jurisdiction to determine its own jurisdiction.
See In re Nica Holdings, Inc., 810 F.3d at 789.
Moreover, Henry points to no error in the district court’s application of the doctrine, nor to any other possible jurisdictional problem that might have deprived the district court of arguable jurisdiction.
Thus, we affirm the district court’s denial of Henry’s Rule 60(b)(4) motion.
1 Rooker v. Fid. Tr. Co., 263 U.S. 413 (1923); D.C. Court of Appeals v. Feld- man, 460 U.S. 462 (1983).
Hey Congress,
When y’all gonna pass the Judicial Transparency and Ethics Enhancement Act, to bring these Outlaws in Dirty Black Robes, called judges, back into line? Judges are replacing democracy with tyranny, and they have no respect for Congress. https://t.co/L5fbbwJz27 pic.twitter.com/WDFC3oFGN6
— lawsinusa (@lawsinusa) September 16, 2022
III.
We review a district court’s denial of a Rule 60(d)(3) motion for relief from a judgment due to the opposing party’s fraud on the court for abuse of discretion.
See Cox Nuclear Pharm., Inc. v. CTI, Inc., 478 F.3d 1303, 1314 (11th Cir. 2007) (Rule 60(b)(3) motion).
Rule 60 does not limit a court’s power to set aside a judgment for fraud on the court.
Fed. R. Civ. P 60(d)(3).
A movant must prove fraud on the court with clear and convincing evidence.
See Booker v. Dugger, 825 F.2d 281, 283-84 (11th Cir. 1987)
(appealing denial of Rule 60(b) motion after denial of § 2254 petition).
Fraud on the court is limited to exceptional conduct like bribery or evidence falsification involving an attorney.
Rozier v. Ford Motor Co., 573 F.2d 1332, 1338 (5th Cir. 1978) (prior version of Rule 60).
We have held that, in independent actions challenging a judgment for fraud on the court, the alleged fraud must not have been raised in the original litigation, and it must not have been possible for the complaining party to raise the issue through reasonable diligence.
See Travelers Indem. Co. v. Gore, 761 F.2d 1549, 1552 (11th Cir. 1985).
Here, the district court addressed fraud on the court, and it correctly found that Henry failed to show sufficiently egregious conduct.
The conduct Henry points to on appeal, even if true, does not fall within the category of egregious conduct that can constitute fraud on the court, but instead amounts to, at most, arguably erroneous legal arguments, or conduct that occurred before she filed her complaint, neither of which come close to the necessary showing of fraud on the court.
See Rozier, 573 F.2d at 1338.
Furthermore, she does not challenge any conduct that was not raised before her Rule 60 motion or that she could not have raised through reasonable diligence.
See Travelers Indem. Co., 761 F.2d at 1552;
Bircoll, 480 F.3d at 1088 n.21.
Thus, we affirm the denial of her Rule 60(d)(3) motion.
LIT OBJECTS TO THE PANEL SUMMARY, WHICH DOES NOT PROVIDE THE ‘CONDUCT’ AT ISSUE, AND BLANKS HENRY’S ARGUMENTS.
IV.
We review a district court’s denial of a motion for extension of time for abuse of discretion.
See Lizarazo v. Miami-Dade Corr. & Rehab. Dep’t, 878 F.3d 1008, 1010-11 (11th Cir. 2017)
(extension of time to file motion for substitution).
A request for an extension should be granted if good cause is shown. Fed. R. Civ. P. 6(b).
Here, Henry arguably has shown good cause for an extension in her motion for an extension to file objections to the magistrate judge’s report and recommendation concerning her Rule 60 motion because she asserted that she did not receive the report and recommendation until after the time for her to file objections had passed and she had been occupied caring for a family member.
We assume arguendo that she showed good cause for an extension.
However, the consequence for failing to object to the magistrate’s report and recommendation is waiver of the right to challenge those issues on appeal.
11th Cir. R. 3-1.
Because we have reviewed Henry’s arguments as if she had not waived them for failing to object, we affirm the denial of her motion for the reasons discussed above.
See R. 3-1; Fed. R. Civ. P. 6(b).
AFFIRMED.
LIT OBJECTS TO THE SCANT LEGAL ANALYSIS OF THE ‘CONSEQUENCE FOR FAILING TO OBJECT TO THE MAGISTRATE REPORT’.
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Appellate Circuit
Constance Daniels, Student of Hard Knocks, Admonished Florida Lawyer and Friend of The Eleventh Circuit
LIF cannot comprehend how the People of Florida and the United States of America are so accepting of Brazen Corruption.
LIF UPDATE
JUL 28, 2024
The case settles on remand from the 11th Circuit and Daniels signs a loan modification agreement with a commencement date of Jun 20, 2023 for a sum of $329k and a period of 144 months with a balloon payment of $267k due on maturity. Her property at 3927 Dunaire Dr, Valrico, FL 33596 is valued today at appx. $457k.
As an aside, admonished Florida lawyer Constance Daniels had around $400k worth of IRS Tax Liens released between 2023 and 2024 ($383k).
LIF UPDATE
OCT 26, 2022
Five months after the 11th Circuit saved a colleague and lawyer from foreclosure, the mandate issued (without en banc hearing) and as instructed (reversed and remanded) the lower court has reopened the case.
LIT will be tracking this case closely, stay tuned.
LIF COMMENTARY
The article below starts with Constance Daniels failure to pay for her law school tuition loan issued in 2003. She defaulted in 2005 per the complaint. The USA won a judgment of $164k+ in 2011.
In 2010, Wells Fargo commenced foreclosure proceedings in state court, Hillsborough County.
While all this was going on, Ms Daniels, a Republican, was attempting to become a State judge in 2014, which failed.
In late November of 2017 a settlement was reached, dismissing the Wells Fargo foreclosure complaint.
In 2017-2018, lawyer Daniels was failing to look after her client(s). Many moons later, in 2021, that would result in a slap on the wrist by the referee, Hon. Daniel D. Diskey for Fl. Bar.
Then we move onto the June 2018 complaint, filed by Daniels against the mortgage servicer. It was removed to the lower court in Middle District of Florida Federal Court.
The court, via one of the Moody clan of judges, sided with Select Portfolio Servicing, LLC and this formed the appeal which was decided this week by the 11th Circuit.
In Nov. 2020, Wells Fargo filed a renewed foreclosure complaint against Daniels and her homestead in State court. In Sept 2021, Wells Fargo voluntarily dismissed the case and terminated the lis pendens ‘due to loan modification’.
The issue for LIF in this case is quite clear. Who the 11th Circuit has chosen to upend it’s prior stance that mortgage servicers can do no wrong under the FDCPA, despite irrefutable facts confirming otherwise.
For example, LIF refers to the case we highlighted regarding a deficiency judgment (State case, March 2022):
“Florida Lawyer Stephanie Schneider Appeals a Mortgage Foreclosure Deficiency Judgment”
In that case, LIF investigated beyond the court opinions to discover the wife is a Florida Lawyer and her husband, Laurence Schneider is owner of S&A Capital, Inc., a mortgage investment company, has built a national portfolio of performing mortgages that have been written off by other financial institutions.
Our angst is clear. Lawyers are being treated preferentially by the courts over regular citizens and homeowners.
In the case of Daniels, whilst she may have legitimate arguments, there have been many citizens who have failed before her by the wordsmithing by the Federal and Appellate Court(s), which has refused to apply the correct legal interpretation of the FDCPA, or clarify the question(s) with the federal consumer agency, the CFPB.
Whilst LIF is unhappy with the anti-consumer watchdog, the Consumer Financial Protection Bureau (CFPB) which is a revolving door for staff to leave the Bureau and go work for a creditor rights law firm without any restriction or time limit (non-compete), the Daniels case should have been referred to the CFPB for interpretation about the matters of ‘first impression’.
The Second Circuit recently did so for a RESPA question in Naimoli v Ocwen and we highlighted the case on our sister website, LawsInTexas.com (Laws In Texas). Instead of doing so in Daniels, there is a dissenting opinion by Judge Lagoa, who’s father in law is a senior judge in SD Florida (Paul C. Huck) and her hubby is a Jones Day Partner and apparently the leader of the Miami Chapter of the Federalist Society. Lagoa herself is a former Florida Supreme Court justice appointed by Gov DeSantis who ‘ensured he puts conservatives on the bench so that anyone coming to court knows how the court will rule’.
LIF anticipates the Daniels case will be subject to a rehearing petition and presented to the full en banc court for reconsideration. The opinion here is similar to the recent Newsom FDCPA opinion, which was too negative towards Wall St and the financial banking services community. As such, it was vacated by the en banc panel while they reconsider. The courts’ decision is currently pending.
In this case, there is still time for the 11th Circuit to correctly ask the CFPB to provide its opinion on the underlying facts raised on appeal and decided by the 3-panel.
However, what the judiciary won’t do is apply this retroactively to the thousands of cases which have been incorrectly tossed in the last 14 years, resulting in homeowners losing their homes to wrongful foreclosures.
United States v. Daniels (2011)
(8:11-cv-01058)
District Court, M.D. Florida
MAY 13, 2011 | REPUBLISHED BY LIT: MAY 26, 2022
USA Motion for Summary Judgment with Exhibits, Doc. 13, Aug 17, 2011
ORDER granting Motion for summary judgment in favor of the Plaintiff and against the defendant in the amount of $109,813.74,
together with accrued interest in the amount of $54,097.10 as of February 28, 2011,
plus interested at the rate of 8.25 percent per annum and a daily rate of $24.80, until the date of judgment;
for post-judgment interest, at the legal rate, from the entry of final judgment until the date of payment;
and for such other costs of litigation otherwise allowed by law.
The Clerk of Court is directed to close the case.
Signed by Judge Elizabeth A. Kovachevich on 9/22/2011.
(SN) (Entered: 09/22/2011)
U.S. District Court
Middle District of Florida (Tampa)
CIVIL DOCKET FOR CASE #: 8:11-cv-01058-EAK-AEP
| USA v. Daniels Assigned to: Judge Elizabeth A. Kovachevich Referred to: Magistrate Judge Anthony E. Porcelli Demand: $164,000 Cause: 28:1345 Default of Student Loan |
Date Filed: 05/13/2011 Date Terminated: 09/22/2011 Jury Demand: None Nature of Suit: 152 Contract: Recovery Student Loan Jurisdiction: U.S. Government Plaintiff |
| Plaintiff | ||
| USA | represented by | I. Randall Gold US Attorney’s Office – FLM Suite 3200 400 N Tampa St Tampa, FL 33602-4798 813/274-6026 Fax: 813/274-6247 Email: FLUDocket.Mailbox@usdoj.gov LEAD ATTORNEY ATTORNEY TO BE NOTICED |
| V. | ||
| Defendant | ||
| Constance Daniels | represented by | Constance Daniels PO Box 6219 Brandon, FL 33608 PRO SE |
| Date Filed | # | Docket Text |
|---|---|---|
| 05/13/2011 | 1 | COMPLAINT against Constance Daniels filed by USA. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Civil Cover Sheet)(MRH) (Entered: 05/13/2011) |
| 05/13/2011 | 2 | Summons issued as to Constance Daniels. (MRH) (Entered: 05/13/2011) |
| 05/13/2011 | 3 | ORDER regulating the processing of civil recovery actions. Service must be perfected by 09/10/2011. Signed by Deputy Clerk on 5/13/2011. (MRH) (Entered: 05/13/2011) |
| 05/13/2011 | 4 | STANDING ORDER: Filing of documents that exceed twenty-five pages. Signed by Judge Elizabeth A. Kovachevich on 7/15/08. (MRH) (Entered: 05/13/2011) |
| 05/19/2011 | 5 | NOTICE of designation under Local Rule 3.05 – track 1 (CLM) (Entered: 05/19/2011) |
| 05/20/2011 | 6 | CERTIFICATE OF SERVICE re 3 ORDER regulating the processing of civil recovery actions by USA (Gold, I.) Modified on 5/20/2011 (MRH). (Entered: 05/20/2011) |
| 05/25/2011 | 7 | CERTIFICATE OF SERVICE by USA (Notice of Designation Under Local Rule 3.05) (Gold, I.) (Entered: 05/25/2011) |
| 07/06/2011 | 8 | RETURN of service executed on 7/5/11 (Marshal 285) by USA as to Constance Daniels. (MRH) (Entered: 07/06/2011) |
| 07/27/2011 | 9 | MOTION for default judgment against Constance Daniels by USA. (Gold, I.) Modified on 7/27/2011 (MRH). NOTE: TERMINATED. INCORRECT MOTION RELIEF. ATTORNEY NOTIFIED. ATTORNEY TO REFILE. (Entered: 07/27/2011) |
| 07/27/2011 | 10 | MOTION for entry of clerk’s default against Constance Daniels by USA. (Gold, I.) Motions referred to Magistrate Judge Anthony E. Porcelli. (Entered: 07/27/2011) |
| 07/28/2011 | 11 | CLERK’S ENTRY OF DEFAULT as to Constance Daniels. (MRH) (Entered: 07/28/2011) |
| 07/29/2011 | 12 | ANSWER to 1 Complaint by Constance Daniels.(BES) (Entered: 07/29/2011) |
| 08/17/2011 | 13 | MOTION for summary judgment by USA. (Attachments: # 1 Exhibit A, # 2 Exhibit B)(Gold, I.) (Entered: 08/17/2011) |
| 09/09/2011 | 14 | ENDORSED ORDER TO SHOW CAUSE as to Constance Daniels.. The plaintiff filed a motion for summary judgment on 8/17/11. The defendant had up to and including 9/3/11 to respond to the motion. To date no response has been filed. Therefore, it is ORDERED that the defendant has up to and including 9/19/11 in which to show cause why the pending motion should not be granted. Signed by Judge Elizabeth A. Kovachevich on 9/9/2011. (SN) (Entered: 09/09/2011) |
| 09/22/2011 | 15 |
ORDER granting 13 Motion for summary judgment in favor of the Plaintiff and against the defendant in the amount of $109,813.74, together with accrued interest in the amount of $54,097.10 as of February 28, 2011, plus interested at the rate of 8.25 percent per annum and a daily rate of $24.80, until the date of judgment; for post-judgment interest, at the legal rate, from the entry of final judgment until the date of payment; and for such other costs of litigation otherwise allowed by law. The Clerk of Court is directed to close the case.. Signed by Judge Elizabeth A. Kovachevich on 9/22/2011. (SN) (Entered: 09/22/2011) |
| 10/12/2011 | 16 | ABSTRACT of judgment as to Constance Daniels. (DMS) (Entered: 10/12/2011) |
Order GRANTING Summary Judgment for $164k Student Loan Debt, Doc. 15, Sep 22, 2011
Daniels v. Select Portfolio Servicing, Inc.
LIF’s Post Reverse and Remand from CA11 Update, July 28, 2024
The case would settle.
(8:18-cv-01652)
District Court, M.D. Florida
NOTICE of settlement Pending by Constance Daniels (Diamond, Kaelyn)
(Entered: 05/10/2023)
60-DAY ORDER OF DISMISSAL re 52 Notice of Pending Resolution. All pending motions, if any, are DENIED as moot. The Clerk is directed to close the file. Signed by Judge James S. Moody, Jr. on 5/10/2023. (SMB)
(Entered: 05/10/2023)
| CLOSED,MEDIATION |
U.S. District Court
Middle District of Florida (Tampa)
CIVIL DOCKET FOR CASE #: 8:18-cv-01652-JSM-CPT
| Daniels v. Select Portfolio Servicing, Inc. Assigned to: Judge James S. Moody, Jr Referred to: Magistrate Judge Christopher P. Tuite
Cause: 28:1332 Diversity-Breach of Contract |
Date Filed: 07/11/2018 Date Terminated: 05/10/2023 Jury Demand: Plaintiff Nature of Suit: 190 Contract: Other Jurisdiction: Diversity |
| Date Filed | # | Docket Text |
|---|---|---|
| 05/24/2022 | 32 | USCAS OPINION issued by court as to Appellant Constance Daniels. Decision: REVERSED and REMANDED as to 29 Notice of Appeal. EOD: 05/24/22; Mandate to issue at a later date. USCA number: 19-10204-GG. (AG) (Entered: 05/26/2022) |
| 08/31/2022 | 33 | USCA ORDER: Appellant’s motion for appellate attorney’s fees is TRANSFERRED to the district court for its consideration of whether Appellant is entitled to appellate attorney’s fees and the amount of appellate attorney’s fees to which Appellant is entitled, if any, as too 29 Notice of Appeal filed by Constance Daniels. EOD: 08/29/2022; USCA number: 19-10204-GG. (AG) (Entered: 08/31/2022) |
| 08/31/2022 | 34 | MOTION for Attorney Fees by Constance Daniels. (Attachments: # 1 Exhibit A, # 2 Declaration, # 3 Exhibits 1-4 to Declaration, # 4 Exhibit)(AG) (Filed in the 11th Circuit on 8/29/2022) Modified on 8/31/2022 (AG). (Entered: 08/31/2022) |
| 09/01/2022 | 35 | ENDORSED ORDER denying without prejudice 34 Motion for Attorney’s Fees. The record reflects that the Mandate from the Eleventh Circuit has not been issued. The Motion for Attorney’s Fees may be refiled after the mandate is issued and docketed. The Motion shall also be modified to comply with the Court’s local rules. Signed by Judge James S. Moody, Jr on 9/1/2022. (JG) (Entered: 09/01/2022) |
| 10/26/2022 | 36 | MANDATE of USCA: REVERSED AND REMANDED as to 29 Notice of Appeal filed by Constance Daniels. Issued as Mandate: 10/26/22. USCA number: 19-10204-GG. (Attachments: # 1 Bill of Costs, # 2 USCA memo)(JNB) (Entered: 10/26/2022) |
| 10/26/2022 | 37 | ENDORSED ORDER: The Clerk is directed to reopen the case. The parties shall file a joint status report within fourteen days as to how they wish to proceed in light of the Eleventh Circuit’s Opinion. Signed by Judge James S. Moody, Jr. on 10/26/2022. (SMB) (Entered: 10/26/2022) |
| 11/03/2022 | 38 | NOTICE of Appearance by Gabriela N. Timis on behalf of Select Portfolio Servicing, Inc. (Timis, Gabriela) (Entered: 11/03/2022) |
| 11/09/2022 | 39 | STATUS report by Constance Daniels. (Diamond, Kaelyn) (Entered: 11/09/2022) |
| 11/09/2022 | 40 | CASE MANAGEMENT REPORT. (Diamond, Kaelyn) (Entered: 11/09/2022) |
| 11/09/2022 | 41 | MOTION for Attorney Fees as to Entitlement to Appellate Fees and Costs Only by Constance Daniels. (Diamond, Kaelyn) (Entered: 11/09/2022) |
| 11/09/2022 | 42 | ENDORSED ORDER: Defendant shall file its answer on or before November 18, 2022. Signed by Judge James S. Moody, Jr. on 11/9/2022. (SMB) (Entered: 11/09/2022) |
| 11/14/2022 | 43 | CASE MANAGEMENT AND SCHEDULING ORDER: Discovery due by 5/26/2023; Dispositive motions due by 6/30/2023; Pretrial Conference set for TUESDAY, DECEMBER 5, 2023, at 9:00 A.M. in Tampa Courtroom 17 before Judge James S. Moody Jr. Jury Trial set on the JANUARY 2024 trial term in Tampa Courtroom 17 before Judge James S. Moody Jr. Conduct mediation hearing by 6/16/2023. Lead counsel to coordinate dates. Signed by Judge James S. Moody, Jr. on 11/14/2022. (SMB) (Entered: 11/14/2022) |
| 11/18/2022 | 44 | ANSWER and affirmative defenses to 23 Amended Complaint by Select Portfolio Servicing, Inc.(Kohn, Joseph) Modified text on 11/21/2022 (MCB). (Entered: 11/18/2022) |
| 11/23/2022 | 45 | RESPONSE in Opposition re 41 MOTION for Attorney Fees as to Entitlement to Appellate Fees and Costs Only filed by Select Portfolio Servicing, Inc. (Kohn, Joseph) Modified text on 11/28/2022 (SET). (Entered: 11/23/2022) |
| 12/12/2022 | 46 | ENDORSED ORDER denying without prejudice as premature 41 Motion for Attorney Fees for the reasons stated in the Response 45. Signed by Judge James S. Moody, Jr on 12/12/2022. (JG) (Entered: 12/12/2022) |
| 01/04/2023 | 47 | NOTICE of mediation conference/hearing to be held on June 14, 2023 at 1:30 P.M. before Gregory Holder. (Diamond, Kaelyn) (Entered: 01/04/2023) |
| 01/04/2023 | 48 | ORDER appointing Gregory P. Holder, Esq. as mediator in this action. Mediation is scheduled for June 14, 2023, at 1:30 p.m. Signed by Judge James S. Moody, Jr. on 1/4/2023. (SMB) (Entered: 01/04/2023) |
| 03/30/2023 | 49 | STIPULATION /Joint Motion to Extend Case Management Deadlines and Incorporated Memorandum of Law by Constance Daniels. (Diamond, Kaelyn) (Entered: 03/30/2023) |
| 03/31/2023 | 50 | ENDORSED ORDER granting in part 49 Joint Motion to Extend Case Management Deadlines filed by Constance Daniels. The pretrial conference and trial dates remain unchanged. No further extensions of time will be granted absent a showing of good cause. The Court will enter an amended scheduling order separately. Signed by Judge James S. Moody, Jr. on 3/31/2023. (SMB) (Entered: 03/31/2023) |
| 03/31/2023 | 51 | CASE MANAGEMENT AND SCHEDULING ORDER: Discovery due by 7/25/2023; Dispositive motions due by 8/29/2023; Pretrial Conference set for TUESDAY, DECEMBER 5, 2023, at 9:00 A.M. in Tampa Courtroom 17 before Judge James S. Moody Jr. JURY TRIAL is set on the JANUARY 2024 trial term in Tampa Courtroom 17 before Judge James S. Moody Jr. Signed by Judge James S. Moody, Jr. on 3/31/2023. (SMB) (Entered: 03/31/2023) |
| 05/10/2023 | 52 | NOTICE of settlement Pending by Constance Daniels (Diamond, Kaelyn) (Entered: 05/10/2023) |
| 05/10/2023 | 53 | 60-DAY ORDER OF DISMISSAL re 52 Notice of Pending Resolution. All pending motions, if any, are DENIED as moot. The Clerk is directed to close the file. Signed by Judge James S. Moody, Jr. on 5/10/2023. (SMB) (Entered: 05/10/2023) |
| PACER Service Center | |||
|---|---|---|---|
| Transaction Receipt | |||
| 07/28/2024 18:04:57 |
JUDGE ESKRIDGE
“ORDER re: By email to the Case Manager, the parties have provided notice of settlement of their dispute.”FIFTH CIRCUIT
“By informing the court that the case had settled, the plaintiff did not “instigate dismissal.” https://t.co/zq7t3oR77E pic.twitter.com/t5p1Tb5p80— lawsinusa (@lawsinusa) July 24, 2024
Daniels v. Select Portfolio Servicing, Inc.
(2018-Present)
(8:18-cv-01652)
District Court, M.D. Florida
ORDER
THIS CAUSE comes before the Court upon Defendant’s Motion to Dismiss Plaintiff’s Second Amended Complaint (Dkt. 24) and Plaintiff’s Response in Opposition (Dkt. 27).
The Court, having reviewed the motion, response, and being otherwise advised in the premises, concludes that Defendant’s motion should be granted.
Specifically, Plaintiff’s second amended complaint will be dismissed with prejudice because any further amendment is futile.
BACKGROUND
As the Court explained in its prior Order granting Defendant’s motion to dismiss, (see Dkt. 22), Plaintiff Constance Daniels initially filed suit in Florida state court against Defendant Select Portfolio Servicing, Inc. (“SPS”) alleging three Florida claims, which included a claim under Florida’s civil Racketeer Influenced and Corrupt Organizations (“RICO”) Act.
On July 10, 2018, SPS removed the case to this Court based on diversity jurisdiction.
On August 6, 2018, SPS moved to dismiss the entire complaint.
In relevant part, SPS argued that the complaint failed to allege any of the elements of a RICO claim.
On August 27, 2018, Daniels filed an amended complaint, which mooted SPS’s motion to dismiss.
Daniels’ amended complaint alleged two claims: a claim under the Fair Debt Collection Practices Act (“FDCPA”) and a claim under the Florida Consumer Collections Practices Act (“FCCPA”).
Both claims relied on the same allegations.
To summarize, Daniels alleged that SPS had “improperly servic[ed]” her mortgage loan “in reckless disregard” of her consumer rights. (Dkt. 12).
The amended complaint did not attach any mortgage statements.
SPS moved to dismiss Daniels’ amended complaint based on her failure to allege that SPS ever attempted to collect the mortgage balance.
The Court granted SPS’s motion.
The Court noted that the amended complaint did not identify or attach any communication from SPS to Daniels.
The Court also surmised that the dispute was more akin to a dispute about an improper accounting of Daniels’ mortgage.
The Court dismissed the FDCPA and FCCPA claims and provided Daniels a final opportunity to amend her complaint.
Daniels filed a second amended complaint.
The allegations are largely unchanged.
But, significantly, Daniels attaches multiple monthly mortgage statements that SPS sent to her.
She now claims that these mortgage statements constitute debt collection activity under the FDCPA and FCCPA.
SPS’s motion to dismiss argues that the monthly mortgage statements comply with Regulation Z of the Truth in Lending Act (the “TILA”)—they were not communications in connection with the collection of a debt—and therefore do not constitute debt collection activity under the FDCPA and FCCPA.
As explained further below, the Court agrees with SPS’s position based on the Court’s detailed review of the monthly mortgage statements.
Therefore, the second amended complaint will be dismissed with prejudice.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 12(b)(6) allows a court to dismiss a complaint when it fails to state a claim upon which relief can be granted.
When reviewing a motion to dismiss, a court must accept all factual allegations contained in the complaint as true.
Erickson v. Pardus, 551 U.S. 89, 94 (2007) (internal citation omitted).
It must also construe those factual allegations in the light most favorable to the plaintiff.
Hunt v. Aimco Properties, L.P., 814 F.3d 1213, 1221 (11th Cir. 2016) (internal citation omitted).
To withstand a motion to dismiss, the complaint must include “enough facts to state a claim to relief that is plausible on its face.”
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).
A claim has facial plausibility “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
Pleadings that offer only “labels and conclusions,” or a “formulaic recitation of the elements of a cause of action,” will not do.
Twombly, 550 U.S. at 555.
DISCUSSION
The FDCPA and FCCPA prohibit debt collectors from using a “false, deceptive, or misleading representation or means in connection with the collection of any debt.”
See e.g. 15 U.S.C. § 1692e (emphasis added);
Fla. Stat. § 559.72 (“In collecting debts, no person shall . . .”) (emphasis added).
It is axiomatic then that the “challenged conduct is related to debt collection” to state a claim under either statute.
Reese v. Ellis, Painter, Ratterree & Adams, LLP, 678 F.3d 1211, 1216 (11th Cir. 2012);
see also Garrison v. Caliber Home Loans, Inc., 233 F. Supp. 3d 1282, 1286 (M.D. Fla. 2017) (“the FCCPA is a Florida state analogue to the federal FDCPA.”) (internal citations omitted).
“[T]he Eleventh Circuit has not established a bright-line rule” as to what qualifies as “in connection with the collection of any debt.”
Dyer v. Select Portfolio Servicing, Inc., 108 F. Supp. 3d 1278, 1280 (M.D. Fla. 2015).
“As a general principle, the absence of a demand for payment is not dispositive,” and courts should “instead consider whether the overall communication was intended to induce the debtor to settle the debt.”
Wood v. Citibank, N.A., No. 8:14-cv-2819-T-27EAJ, 2015 WL 3561494, at *3 (M.D. Fla. June 5, 2015) (citations omitted).
The second amended complaint attaches multiple monthly mortgage statements.1
Because the communications at issue here are all monthly mortgage statements, a discussion of the TILA is necessary.
The TILA requires SPS, a servicer, to send monthly mortgage statements.
12 C.F.R. § 1026.41. Specifically, 12 C.F.R. § 1026.41(d) requires that servicers provide debtors with detailed monthly mortgage statements containing, among other things: the “amounts due;” the “payment due date;” “the amount of any late payment fee, and the date that fee will be imposed if payment has not been received;” “an explanation of amount due, including a breakdown showing how much, if any, will be applied to principal, interest, and escrow and, if a mortgage loan has multiple payment options, a breakdown of each of the payment options;” “any payment amount past due;” a breakdown of “the total of all payments received since the last statement” and “since the beginning of the current calendar year;” “a list of all transaction activity that occurred since the last statement;” “partial payment information;” “contact information;” and detailed “account information” and “delinquency information.”
The Consumer Financial Protection Bureau (the “CFPB”) has issued a bulletin providing that a
“servicer acting as a debt collector would not be liable under the FDCPA for complying with [monthly mortgage statement] requirements.”
Implementation Guidance for Certain Mortgage Servicing Rules, 10152013 CFPB GUIDANCE, 2013 WL 9001249 (C.F.P.B. Oct. 15, 2013).
Courts have largely followed this guidance.
See, e.g., Jones v. Select Portfolio Servicing, Inc., No. 18-cv-20389, 2018 WL 2316636, at *3 (S.D. Fla. May 2, 2018) (citing 12 C.F.R. § 1026.41(d));
Brown v. Select Portfolio Servicing, Inc., No. 16-62999-CIV, 2017 WL 1157253 (S.D. Fla. Mar. 24, 2017) (noting the guidance and finding that monthly mortgage statements in compliance with the TILA were not debt collection).
The monthly mortgage statements at issue here were in conformity with the TILA requirements.
Moreover, the subject statements were substantially similar to model form H-30(B) provided by Appendix X to Part 1026 of TILA Regulation Z.
See also Jones, 2018 WL 2316636, at *4 (noting the similarities between a monthly mortgage statement and the model form in concluding no debt collection).
Although the monthly mortgage statements may not be identical to model form H-30(B), the differences are not significant deviations.
Notably, the plaintiff in Brown brought a nearly identical lawsuit against SPS.
The court explained in detail why the plaintiff was unable to state a claim under the FDCPA and FCCPA because the monthly mortgage statement was required to be sent pursuant to the TILA.
The complaint in Brown was dismissed with prejudice because “amendment would be futile” given that the basis for the claims was a monthly mortgage statement that was not actionable as a matter of law.
See 2017 WL 1157253, at *2-*4.
Also, the Jones court discussed in detail the numerous prior decisions addressing this issue, including multiple cases from this district that have held that monthly mortgage statements
“are almost categorically not debt collection communications under the FDCPA.”
2018 WL 2316636, at *5 (citing cases).
The particular monthly mortgage statements before the court in Jones were also sent by SPS and were substantively identical to the statements at issue in this case and in Brown.
Most recently, in Mills v. Select Portfolio Servicing, Inc., No. 18-cv-61012- BLOOM/Valle, 2018 WL 5113001 (S.D. Fla. Oct. 19, 2018), the court “agree[d] with the reasoning in Jones and [concluded] that the Mortgage Statements at issue [were] not communications in connection with a collection of a debt.” Id. at *2.
In conclusion, the substance of the monthly mortgage statements at issue in this case is substantially similar to model form H-30(B).
Any minor discrepancies in the language—when taken in the context of the document as an otherwise carbon copy of form H-30(B)—do not take the statements out of the realm of a monthly mortgage statement and into the realm of debt collection communications.
It is therefore ORDERED AND ADJUDGED that:
1. Defendant’s Motion to Dismiss Plaintiff’s Second Amended Complaint (Dkt.
24) is granted.
2. Plaintiff’s Second Amended Complaint is dismissed with prejudice.
3. The Clerk of Court is directed to close this case and terminate any pending motions as moot.
DONE and ORDERED in Tampa, Florida on December 18, 2018.
Copies furnished to: Counsel/Parties of Record
Judge Bert Jordan’s “Reputation” Warning to New Florida Lawyers
Constance Daniels Admonished by the Florida Bar (2021)
Constance Daniels, P.O. Box 6219, Brandon, admonishment in writing and directed to attend Ethics School effective immediately following a November 24 court order.
(Admitted to practice: 1995)
Daniels failed to act with reasonable diligence and failed to communicate with her client in connection with a dissolution of marriage action.
Daniels also failed to timely respond to the Bar’s formal complaint.
Constance Daniels v. Select Portfolio Servicing, Inc. (2022)
11th Cir., Published Opinion
(19-10204, May 24, 2022)
“A matter of first impression” 14 Years after the great recession and greatest theft of citizens homes in the history of the United States.
It’s quite incredulous how the 11th Circuit selects a Sanctioned Fl. Republican Lawyer, a failed judicial candidate and one who is facing foreclosure, for this ‘landmark’ published opinion in 2022.
Panel Author, Judge Bert Jordan, joined by Judge Brasher with a dissenting opinion by Judge Babs Lagoa
Selective Justice = Ochlocracy and Corruption.
WHY IS THERE NO CHARGES FOR LAWYERS STEALIN’ MILLIONS? https://t.co/gkMkVMboYZ@USAO_NJ @USAO_MDFL @SDFLnews @CityBocaRaton @AGAshleyMoody @flcourts @TheFlaBar @FLBarPresident @SWFLCourts @WSJ @nytimes @reason @MotherJones @ABC— lawsinusa (@lawsinusa) May 26, 2022
11th Circuit revives FDCPA lawsuit over mortgage statement language
How Westlaw is Summarizing the Latest Eleventh Circuit Opinion
(May 26, 2022)
Resolving an issue of first impression, a divided federal appeals panel has held that mortgage servicers can be liable under the Fair Debt Collection Practices Act for inaccuracies in monthly mortgage statements that contain additional debt-collection language.
Daniels v. Select Portfolio Servicing Inc., No. 19-10204, (11th Cir. May 24, 2022).
In a 2-1 decision, the 11th U.S. Circuit Court of Appeals on May 24 reinstated Constance Daniels’ lawsuit against Select Portfolio Servicing Inc., in which she alleges the company used faulty mortgage statements to try to collect payments she did not owe.
Writing for the panel majority, U.S. Circuit Judge Adalberto J. Jordan acknowledged that Select Portfolio was required to issue the mortgage statements under the Truth in Lending Act, 15 U.S.C.A. § 1638.
However, the mortgage statements fell within the scope of the FDCPA’s prohibition on false or misleading representations, 15 U.S.C.A. § 1692e, because they included additional debt-collection language — “this is an attempt to collect a debt” — the opinion said.
Judge Jordan reasoned that “in determining whether a communication is in connection with the collection of a debt, what could be more relevant than a statement in the communication than ‘this is an attempt to collect a debt’?”
U.S. Circuit Judge Barbara Lagao dissented, saying the majority treated the language like “magic words” that could convert an otherwise routine mortgage statement into a communication covered by the FDCPA.
Judge Lagoa also argued that the decision created a circuit split, although the panel majority insisted that the facts of Daniels’ case distinguished it from others in which federal circuit courts seemed to reach a contrary result.
District Court tosses FDCPA claims
Daniels sued Select Portfolio in the U.S. District Court for the Middle District of Florida in July 2018.
According to the suit, Daniels had prevailed in a state court foreclosure action brought by lender Wells Fargo in 2015, with the judge sanctioning Wells Fargo and enforcing an earlier loan modification agreement between the parties.
But Daniels’ mortgage servicer, Select Portfolio, later issued several monthly mortgage statements misstating the principal balance and amount due, and falsely claiming that her loan was in arrears, the suit says.
At least three of the mortgage statements included the sentence, “This is an attempt to collect a debt,” according to the suit.
Daniels accuses Select Portfolio of using false or misleading representations in connection with the collection of a debt, in violation of the FDCA and the Florida Consumer Collection Practices Act, Fla. Stat. Ann. § 559.72.
Select Portfolio moved to dismiss, saying Daniels was attempting hold it liable for issuing mortgage statements that are required under the Truth in Lending Act.
U.S. District Judge James S. Moody Jr. agreed and dismissed the suit in December 2018. Daniels v. Select Portfolio Servs. Inc., No. 18-cv-1652, (M.D. Fla. Dec. 18, 2018).
Judge Moody said that any discrepancies in language between Select Portfolio’s monthly statements and what is required under TILA “do not take the statements out of the realm of a monthly mortgage statement and into the realm of debt collection communications.”
On appeal, Daniels argued that compliance with TILA does not make a mortgage servicer immune from suit under the FDCPA and, even if it did, the monthly statements at issue included language beyond what is necessary under TILA.
Kaelyn S. Diamond and Michael A. Ziegler of the Law Office of Michael A. Ziegler represented Daniels.
Benjamin B. Brown and Joseph T. Kohn of Quarles & Brady LLP represented Select Portfolio.
By Dave Embree
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Appellate Circuit
Deutsche Bank and Nationstar Watch as 11th Circuit Discharge the Shotgun Despite Hunt’s Pleadings
There can be no doubt that this is a frivolous appeal and we would not hesitate to order sanctions if appellant had been represented by counsel.
Hunt v. Nationstar Mortg., No. 21-10398
(11th Cir. May 27, 2022)
MAY 27, 2022 | REPUBLISHED BY LIT: MAY 30, 2022
Before ROSENBAUM, GRANT, and MARCUS, Circuit Judges. PER CURIAM:
Christopher M. Hunt, Sr., proceeding pro se, appeals following the district court’s dismissal of his civil complaint arising out of his 2006 purchase of residential property located in Atlanta, Georgia (the “Property”).
Hunt purchased the Property using proceeds from a loan that he eventually defaulted on, which prompted Nationstar Mortgage, LLC (“Nationstar”), then servicer of the loan, to seek a non-judicial foreclosure on the Property.
After filing or being named in a variety of related lawsuits,1 Hunt filed the instant pro se complaint in Georgia state court in June 2020 and named as defendants Nationstar, the Deutsche Bank National Trust
1 See, g., Hunt v. Nationstar Mortg., LLC, 684 F. App’x 938 (11th Cir. 2017) (unpublished) (“Hunt I”);
[MARCUS, ROSENBAUM AND ANDERSON]
Hunt v. Nationstar Mortg., LLC, 779 F. App’x 669 (11th Cir. 2019) (unpublished);
[PRYOR,W., GRANT AND ANDERSON]
Hunt v. Nationstar Mortg., LLC, 782 F. App’x 762 (11th Cir. 2019) (unpublished);
[PRYOR,W., GRANT AND ANDERSON]
Deutsche Bank Tr. Co. Am., as Tr. for Fifteen Piedmont Ctr. v. Hunt, 783 F. App’x 998 (11th Cir. 2019) (unpublished).
[TJOFLAT, JORDAN AND NEWSOM]
Companies (“Deutsche Bank”), and Jay Bray, the CEO of Nationstar.
He alleged that they had committed, inter alia, mortgage fraud and wrongful foreclosure in violation of federal laws, including the Sarbanes-Oxley Act and the Dodd-Frank Act.2
The district court denied a variety of preliminary motions filed by Hunt;
dismissed, without prejudice, the complaint as to defendant Bray for failure to effect proper service;
and
dismissed, with prejudice, the complaint as to Deutsche Bank and Nationstar, because it was a “shotgun” pleading, was barred by res judicata, and failed to state a claim upon which relief could be granted.3
After thorough review, we affirm.
I.
Whether a court has subject-matter jurisdiction, including removal jurisdiction, is a question of law that we review de novo.
See McGee v. Sentinel Offender Servs., LLC, 719 F.3d 1236, 1241 (11th Cir. 2013).
We also review de novo a denial of a motion to
2 Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (hereinafter “Sarbanes-Oxley Act”), and the Dodd-Frank Wall Street Reform and Con- sumer Protection Act, Pub. L. No. 111-203, 124 Stat. 1376 (2010) (hereinafter “Dodd-Frank Act”).
3 Hunt also named Christian Sewing, the Chief Executive Officer (“CEO”) of Deutsche Bank, as a defendant, but he later voluntarily dismissed him.
And after filing the complaint, Hunt sought to add yet another defendant, the Albertelli Law Firm (“Albertelli Law”).
Bray, Sewing and Albertelli Law have not filed any briefs on appeal.
remand to state court. Conn.
State Dental Ass’n v. Anthem Health Plans, 591 F.3d 1337, 1343 (11th Cir. 2009).
A district court’s decision regarding the indispensability of a party is reviewed for abuse of discretion.
United States v. Rigel Ships Agencies, Inc., 432 F.3d 1282, 1291 (11th Cir. 2005).
We will disturb a district court’s refusal to change venue only for a clear abuse of discretion.
Robinson v. Giarmarco & Bill, P.C., 74 F.3d 253, 255 (11th Cir. 1996).
We also review the district court’s denial of a motion for recusal for abuse of discretion.
Jenkins v. Anton, 922 F.3d 1257, 1271 (11th Cir. 2019).
We review a district court’s grant of a motion to dismiss for insufficient service of process, under Rule 12(b)(5), by applying a de novo standard to questions of law, and a clear error standard to the court’s findings of fact.
Albra v. Advan, Inc., 490 F.3d 826, 829 (11th Cir. 2007).
But when a party fails to object to a magistrate judge’s findings or recommendations in a report and recommendation, he “waives the right to challenge on appeal the district court’s order based on unobjected-to factual and legal conclusions.” 11th Cir. R. 3-1.
Under the circumstances, we review a claim on appeal only “for plain error,” if “necessary in the interests of justice.” Id.
We review the dismissal of a “shotgun” pleading under Rule 8 for abuse of discretion.
Vibe Micro, Inc. v. Shabanets, 878 F.3d 1291, 1294 (11th Cir. 2018).
When appropriate, we will review a district court’s dismissal for failure to state a claim under Rule 12(b)(6) de novo.
Am. United Life Ins. Co. v. Martinez, 480 F.3d 1043, 1056–57 (11th Cir. 2007).
We will also review a dismissal
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based on res judicata de novo.
Jang v. United Techs. Corp., 206 F.3d 1147, 1149 (11th Cir. 2000).
We review de novo a district court’s conclusions on collateral estoppel, but review its legal conclusion that an issue was actually litigated in a prior action for clear error.
Richardson v. Miller, 101 F.3d 665, 667–68 (11th Cir. 1996).
While pro se pleadings are liberally construed, issues not briefed on appeal are normally forfeited and we will generally not consider them.
Timson v. Sampson, 518 F.3d 870, 874 (11th Cir. 2008).
An appellant can abandon a claim by:
(1) making only passing reference to it;
(2) raising it in a perfunctory manner without supporting arguments and authority;
(3) referring to it only in the “statement of the case” or “summary of the argument”;
or
(4) referring to the issue as mere background to the appellant’s main arguments.
Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 681– 82 (11th Cir. 2014).
In addition, if a district court’s order rested on two or more independent, alternative grounds, the appellant must challenge all of the grounds to succeed on appeal.
See id. at 680.
When an appellant fails to challenge on appeal one of the grounds on which the district court based its judgment, he is deemed to have abandoned any challenge of that ground, and it follows that the judgment is due to be affirmed.
See id.
II.
Liberally construed, Hunt’s brief on appeal seeks to challenge the district court’s decisions:
(1) denying remand of his case to state court
and
denying his request to file an amended complaint adding another defendant, Albertelli Law;
(2) denying his request
to transfer the case;
(3) denying his request to disqualify the judge;
(4) dismissing, without prejudice, his complaint as to defendant Bray for failure to effect proper service;
and
(5) dismissing his complaint, with prejudice, as to Deutsche Bank and Nationstar.
To be sure, Hunt’s arguments about these decisions by the district court are not clearly stated.
But even if we were to assume that he has preserved his arguments on appeal, they fail on the merits.
First, we are unpersuaded by Hunt’s arguments that the district court should have allowed him to file an amended complaint to add another party to the suit, which would have deprived the federal court of jurisdiction, and should have remanded the case to state court.
Federal courts have diversity-of-citizenship jurisdiction when the parties are citizens of different states and the amount in controversy exceeds $75,000.
28 U.S.C. § 1332(a)(1).
A corporation is a citizen of every state where it was incorporated and the one state in which it has its principal place of business.
Daimler AG v. Bauman, 571 U.S. 117, 133, 137 (2014); 28 U.S.C. § 1332(c)(1).
A defendant may remove any civil action brought in a state court to a federal district court that has original jurisdiction over the action.
28 U.S.C. § 1441(a).
The removing party bears the burden of proving that removal jurisdiction exists.
McGee, 719 F.3d at 1241.
Here, the district court did not err in denying Hunt’s motion to remand. As we’ve held in a previous appeal, his motion was based on his belated and fraudulent attempts to join Albertelli Law, in an effort to defeat the district court’s diversity jurisdiction.
See Hunt I, 684 F. App’x. at 942-44.
However, Hunt asserted federal
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— LawsInTexas (@lawsintexasusa) January 29, 2022
claims in his complaint, so the district court had jurisdiction in any event.
28 U.S.C. § 1441(a).
Accordingly, the district court correctly denied Hunt’s requests to remand the case and acted within its discretion to deny joinder.
Rigel Ships Agencies, Inc., 432 F.3d at 1291.
We also find no merit to Hunt’s claims that the district court should have transferred venue of his lawsuit.
A district court may transfer a civil action to any other district or division where it may have been brought “for the convenience of the parties and witnesses, and in the interest of justice.”
Robinson, 74 F.3d at 260 (quoting 28 U.S.C. § 1404(a)).
But in this case, the district court did not err because Hunt did not provide any cognizable reason for a transfer.
It appears that Hunt’s transfer request was based on his belief that case law in the United States District Court for the Middle District of Georgia would be more favorable to him – which is not a legitimate reason for transfer.
See 28 U.S.C. § 1404(a).
Similarly, we reject Hunt’s argument that the district court judge should have recused himself.
A judge must sua sponte recuse himself “in any proceeding in which his impartiality might reasonably be questioned” or “
28 U.S.C. § 455(a), (b)(1).
“The test is whether an objective, disinterested, lay observer fully informed of the facts underlying the grounds on which recusal was sought would entertain a significant doubt about the judge’s impartiality.”
Parker v. Connors Steel Co., 855 F.2d 1510, 1524 (11th Cir. 1988).
“Ordinarily, a judge’s rulings in the same or a related case may not serve as
the basis for a recusal motion.”
McWhorter v. City of Birmingham, 906 F.2d 674, 678 (11th Cir. 1990).
“The judge’s bias must be personal and extrajudicial; it must derive from something other than that which the judge learned by participating in the case.”
Id.
“The exception to this rule is when a judge’s remarks in a judicial context demonstrate such pervasive bias and prejudice that it constitutes bias against a party. Mere friction . . . however, is not enough to demonstrate pervasive bias.”
Thomas v. Tenneco Packaging Co., 293 F.3d 1306, 1329 (11th Cir. 2002) (quotation marks omitted).
As the record before us makes clear, no “objective, disinterested, lay observer fully informed of the facts underlying” these circumstances “would entertain a significant doubt about the judge’s impartiality.”
Parker, 855 F.2d at 1524.
Accordingly, the district court did not abuse its discretion in denying Hunt’s request for recusal or disqualification.
Nor do we find any merit to Hunt’s argument that the district court erred in dismissing the complaint against defendant Bray for lack of proper service.
When a federal court is considering the sufficiency of process after removal, it does so by looking to the state law governing process.
See Usatorres v. Marina Mercante Nicaraguenses, S.A., 768 F.2d 1285, 1286 n.1 (11th Cir. 1985).
Georgia law provides that service made “outside the state” of Georgia is to be done “in the same manner as service is made within the state.”
O.C.G.A. § 9-10-94.
Under Georgia law, service on natural persons is to be made “personally, or by leaving copies thereof at the defendant’s dwelling house or usual place of abode with some
person of suitable age and discretion then residing therein, or by delivering a copy of the summons and complaint to an agent authorized . . . to receive service of process.”
O.C.G.A. § 9-11-4(e)(7).
Notably, Hunt does not dispute these proposed findings set forth by the magistrate judge’s Report and Recommendation (“R&R”), that Hunt:
(1) mailed service to Bray;
and
(2) completed “corporate service” on Deutsche Bank, which Hunt asserted was also effective to serve Bray.
11th Cir. R. 3-1.
But, as the district court determined, Georgia law applied here and required personal service in these circumstances.
Albra, 490 F.3d at 829; O.C.G.A. § 9-11-4(e)(7).
Bray therefore was not properly served under Georgia law, and, for that reason, the district court did not err in dis- missing Hunt’s suit without prejudice as to Bray.
Finally, we find no error in the district court’s denial of injunctive relief and its dismissal of Hunt’s complaint against the two remaining defendants, Nationstar and Deutsche Bank.
A district court has the inherent authority to control its docket and ensure the prompt resolution of lawsuits, which includes the ability to dismiss a complaint on “shotgun” pleading grounds.
Shabanets, 878 F.3d at 1295.
We have described four types of “shotgun” com- plaints:
(1) those containing multiple counts where each count adopts all allegations of all preceding counts;
(2) those replete with conclusory, vague, and immaterial facts not obviously connected to any particular cause of action;
(3) those that do not separate each cause of action or claim for relief into different counts;
and
(4) those asserting multiple claims against multiple defendants without
specifying which of the defendants are responsible for which acts or omissions, or which of the defendants the claim is brought against.
Weiland v. Palm Beach Cnty. Sheriff’s Off., 792 F.3d 1313, 1321–23 (11th Cir. 2015).
“Shotgun” pleadings violate Rule 8, which requires “a short and plain statement of the claim showing that the pleader is entitled to relief,” Fed. R. Civ. P. 8(a)(2), by failing to, in one degree or another, give the defendants adequate notice of the claims against them and the grounds upon which each claim rests.
Shabanets, 878 F.3d at 1294–96.
We generally require district courts to allow a litigant at least one chance to remedy any deficiencies before dismissing the complaint with prejudice, where a more carefully drafted complaint might state a claim.
See id.; Silberman v. Miami Dade Transit, 927 F.3d 1123, 1132 (11th Cir. 2019).
But it need not grant leave to amend the complaint when further amendment would be futile.
Silberman, 927 F.3d at 1133.
Under federal law, res judicata, or claim preclusion, bars a subsequent action if
“(1) the prior decision was rendered by a court of competent jurisdiction;
(2) there was a final judgment on the merits;
(3) the parties were identical in both suits;
and
(4) the prior and present causes of action are the same.”
Jang, 206 F.3d at 1148– 49 & n.1 (quotation marks omitted).
We have held that “if a case arises out of the same nucleus of operative facts, or is based upon the same factual predicate, as a former action, the two cases are really the same ‘claim’ or ‘cause of action’ for purposes of res judicata.”
Baloco v. Drummond Co., Inc., 767 F.3d 1229, 1247 (11th
Cir. 2014) (quotation marks omitted and alterations adopted).
“In addition, res judicata applies not only to the precise legal theory presented in the prior case, but to all legal theories and claims arising out of the nucleus of operative fact” that could have been raised in the prior case.
Id. (quotation marks omitted and alterations adopted).
Collateral estoppel, or issue preclusion, “refers to the effect of a judgment in foreclosing relitigation of a matter that has been litigated and decided.”
Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 77 n.1 (1984).
Thus, “collateral estoppel is appropriate only when the identical issue has been fully litigated in a prior case.”
In re McWhorter, 887 F.2d 1564, 1567 (11th Cir. 1989) (quotation marks omitted).
“The party seeking to invoke collateral estoppel bears the burden of proving that the necessary elements have been satisfied.”
Id. at 1566.
“[C]hanges in the law after a final judgment [generally] do not prevent the application of res judicata and collateral estoppel, even though the grounds on which the decision was based [may be] subsequently overruled.”
Precision Air Parts, Inc. v. Avco Corp., 736 F.2d 1499, 1503 (11th Cir. 1984).
To safeguard investors in public companies and restore trust in the financial markets, Congress enacted the Sarbanes-Oxley Act of 2002, 116 Stat. 745.
See S. Rep. No. 107-146, pp. 2–11 (2002).
The Act contains several provisions, including a whistleblower protection provision which prohibits a publicly traded company or its officers from discharging an “employee” for providing information to a supervisory authority about conduct that the employee
“reasonably believes” constitutes a violation of federal laws against mail fraud, wire fraud, bank fraud, securities fraud, any SEC rule or regulation, or any provision of federal law relating to fraud against shareholders.
See 18 U.S.C. § 1514A(a)(1).
The Dodd-Frank Act whistleblower provision provides protection to individuals who provide “information relating to a violation of the securities laws to the” Securities and Exchange Commission (“SEC”).
15 U.S.C. § 78u-6(a)(6).
Thus, “[t]o sue under Dodd-Frank’s anti-retaliation provision, a person must first provide information relating to a violation of the securities laws to the [SEC].”
Dig. Realty Trust, Inc. v. Somers, 138 S. Ct. 767, 772–73 (2018) (quotation marks omitted and alterations adopted).
In his brief on appeal, Hunt does not expressly address the lower court’s “shotgun” pleading determination, and, as a result, the district court’s dismissal of the complaint is due to be affirmed.
Sapuppo, 739 F.3d at 681–82.
But in any event, the district court did not err in finding that his complaint was a “shotgun” pleading.
As the record reflects, the complaint consisted of three numbered paragraphs that spanned paragraphs and pages; failed to isolate claims by defendants;
and largely failed to discuss any facts — thereby falling into several of our identified categories of prohibited “shotgun” pleadings.
Weiland, 792 F.3d at 1321-23.
The district court also was correct that amendment would have been futile.
For one, res judicata and collateral estoppel barred Hunt’s claims for breach of contract and fraud, since Hunt sued the same parties for the same alleged breach of contract and fraud in several prior cases.
See, e.g., Hunt I, 684 F. App’x at 944.4
These decisions were final judgments and were “rendered by a court of competent jurisdiction,” “on the merits,” against the same parties, and “the prior and present causes of action [were] the same.”
Jang, 206 F.3d at 1149.
Moreover, even if some of Hunt’s claims had not been explicitly presented in any of his prior cases, they would still be barred by res judicata because every claim arose from the same facts as each of his prior cases, and he could have raised them in any of the prior proceedings.
Baloco, 767 F.3d at 1247.
Also, despite Hunt’s arguments, there have been no “changes in the law” that would “prevent the application of res judicata and collateral estoppel” in this case.
Precision Air Parts, 736 F.2d at 1503.
In addition, Hunt’s claims under the Sarbanes-Oxley Act and Dodd-Frank Act were futile because they fail to state a claim upon which relief could be granted.
As the record reflects, Hunt did not allege that he was an “employee” under the Sarbanes-Oxley Act, nor that he “provide[d] information relating to a violation of the securities laws to the [SEC]” as required under the Dodd-Frank Act.
4 To the extent that Hunt challenges the district court’s decisions under Fed. R. Civ. P. 60(b), we conclude that he has not identified any “extraordinary circumstances” entitling him to relief, and the district court did not abuse its discretion in this respect.
Toole v. Baxter Healthcare Corp., 235 F.3d 1307, 1316 (11th Cir. 2000) (quotation marks omitted).
Somers, 138 S. Ct. at 772–74.
Accordingly, Hunt did not state a cause of action under these statutes, and we affirm.
AFFIRMED.5
5 All of Hunt’s pending motions, which he filed after we imposed a filing restriction on him, are DENIED to the extent they request any relief.
For their part, Nationstar and Deutsche Bank have filed renewed motions for sanctions, requesting monetary sanctions against Hunt for his numerous motions before this Court under 11th Cir. R. 27-4.
Hunt is pro se and we DENY the motions for sanctions at this time.
See Woods v. I.R.S., 3 F.3d 403, 404 (11th Cir. 1993)
(“There can be no doubt that this is a frivolous appeal and we would not hesitate to order sanctions if appellant had been represented by counsel. However, since this suit was filed pro se, we conclude that sanctions would be inappropriate.”).
Although we are reluctant to impose sanctions on pro se appellants, we warn Hunt that our Court has imposed sanctions in circumstances like these, even for pro se litigants, and he is strongly cautioned against bringing any further frivolous motions or claims.
See Ricket v. United States, 773 F.2d 1214, 1216 (11th Cir. 1985)
(imposing sanctions on a pro se appellant who had been warned by the district court that the issues on appeal were frivolous).
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April 2022 Foreclosure Stay Raises Serious Questions as to ‘Divorce Status’ Of Tim and Jennifer Howard
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Editors Choice2 years agoWhere Is He Now? Fraudster Francis Santa Was Sentenced to 88 Months for Conspiracy
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Bankruptcy5 years agoTwo Florida Foreclosure Lawyers Matt Fuqua and Clay Milton Commit the Most Abhorrent Act
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Acceleration4 years agoWho is Catalina Azuero, a Liar Lawyer at Goodwin Procter LLP?
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Editors Choice3 years agoJudge Barbara Hobbs Son is Arrested for Attempted Murder. Her ExtraJudicial Intervention is Granted
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Editors Choice2 years agoA Message for Felon Francis Santa: We Cannot Be Bribed. Stop the Harassment
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Federal Judges2 years agoSelective Justice: Law Firm Assistant Criminally Charged with $3M IOLTA Theft But Lawyers Who Steal Millions Are Not.
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Eleventh Circuit4 years agoFlorida Insurance Defense Lawyer Curtis Lee Allen Faces Ethics Complaint Filed by the Florida Bar
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Appellate Circuit4 years agoWho is Liar Lawyer Sabrina Rose-Smith of Goodwin Procter, LLP?