Thomas Wade Young - Trials & Appeals

The U.S. Supreme Court kicks off its October Term on Monday, October 3, 2011, with oral arguments in a case involving California’s cuts to Medicaid. The issue is not about the propriety of the cuts but about whether the plaintiffs may sue to challenge the cuts. The outcome is expected to affect other challenges to the methods by which states implement federal programs. The justices will also meet in conference for the first time since June. To read about the cases the Court has already agreed to hear this term and the cases the Court may agree to review, see this page of the SCOTUS blog

Under Florida law, the decision of any of the five courts of appeal binds circuit (trial) courts across the state unless conflict exists on the point of law in question. If conflict exists, the circuit court is bound by the law of the court of appeal over the geographical territory in which the circuit court is located.

Because of this rule, the circuit court for Seminole County – in an appeal from the Seminole County Court – held that subpoenas issued in a criminal case requiring only the production of documents were not subject to the “Uniform Law to Secure the Attendance of Witnesses from Within or Without the State in Criminal Proceedings.” The court court’s affirmation of the county court’s ruling was based on decisions to the same effect by Florida’s Second and Third District Courts of Appeal because of the general rule stated at the beginning of this post. See General Motors Corp. v. State, 357 So. 2d 1045, 1047 (Fla. 3d DCA 1978); CMI, Inc. v. Landrum, 64 So. 3d 693 (Fla. 2d DCA 2010), review denied, 54 So. 3d 973 (Fla. 2011). In the first decision on the issue, the Third District held 1) the Uniform Law applies only to witnesses outside of Florida, and 2) the Uniform Law does not apply to requests that seek only the production of documents.

District Courts of Appeal infrequently review appeals from county courts after a circuit court has determined the appeal in the first instance, especially when the circuit court decided the appeal by following precedent from another district court of appeal. In CMI, Inc. v. Ulloa, No. 5D10-4079 (Fla. 5th DCA Sept. 16, 2011), however, the Fifth District Court of Appeal granted “the narrow remedy of second-tier certiorari” because it disagreed with the Second and Third Districts. The Fifth District granted second-tier certiorari because, if it did not do so, the issue would never be decided by the Florida Supreme Court. As the court explained, “[o]ne district court of appeal, as the first to address an important issue, can bind all the circuit courts throughout the state if the other districts are unwilling to disturb precedent based on the general standard of limited review in second-tier certiorari proceedings.”

Because CMI – the maker of an intoxilyzer used to administer breath tests to the defendants who issued the subpoenas for records – was not a party to the criminal cases and not otherwise involved in a legal dispute, the Fifth District concluded that serving a subpoena to CMI’s resident agent was ineffective. “The registered agent has a limited role, and is not a corporate employee or custodian of corporate records.” Thus, “the subpoena power of a Florida court over a person or legal entity which is not a party in a lawsuit does not extend beyond state lines.” “The long-arm statute does not extend the subpoena power of a Florida court to command the in-state attendance of a nonresident, non-party person or entity, or compel that person or entity to produce documents. . . . The only way to secure such out-of-state witnesses or documents in a criminal case is to follow the procedures of the Uniform Law.” (Citations omitted.)

Based on it’s rationale, the Fifth District quashed the circuit court’s order and certified conflict with the Second and Third District Courts of Appeal in order to create a jurisdictional basis for review by the Florida Supreme Court. The Fifth District’s opinion is now binding on all courts within its territorial jurisdiction, which covers the following counties: Hernando, Citrus, Sumter, Marion, Lake, Orange, Osceola, Brevard, Seminole, Volusia, St. Johns, and Putnam. Significantly, the creation of conflict also now frees county and circuit courts within the territorial jurisdiction of the First and Fourth District Courts to decide the issue as they believe their own district courts of appeal would decide the issue.

If you work for a faith-based organization, don’t expect protection from discrimination directed toward you own beliefs. That was the message sent by the United States Court of Appeals for the Fourth Circuit in Kennedy v. St. Joseph’s Ministries, Inc., No. 10-1792 (4th Cir. September 14, 2011).

Kennedy involved the termination of a 13-year employee’s employment after she refused to stop wearing long dresses and a cover for her hair, which “was a function of her religious beliefs” as a member of the Church of the Brethren. The employer, a nursing-care facility operated “under the direction of the Daughters of Charity, a religious order within the Roman Catholic Church” and maintained “in accordance with Catholic principles” asked Kennedy to modify her attire because it “was inappropriate for a Catholic facility and … made residents and their family members feel uncomfortable.”

The district court interpreted Title VII’s exemption for religious organizations as prohibiting a lawsuit for the termination of Kennedy’s employment, but it ruled the nursing home could be liable for harassment and retaliation based on Kennedy’s religious beliefs. Applying the plain language of the federal statute, the Fourth Circuit’s 2-1 opinion rejected the incongruous logic of the district court. It also reaffirmed that even religious organizations remain liable for other forms of prohibited discrimination: “Section 2000e-1(a) does not exempt religious organizations from Title VII’s provisions barring discrimination on the basis of race, gender, or national origin.”

With regard to religious discrimination, however, the court pointed to 42 U.S.C. § 2000e-1(a), which provides:

The meaning of this plain language, the court said, permits religious organizations to “terminate an employee whose conduct or religious beliefs are inconsistent with those of its employer.” Because religious organizations can terminate employees for religious reasons, the court reasoned it would be incompatible with the actual language of the statute to exclude other types of adverse employment decisions, short of hiring and firing. Limiting the exemption to hiring and firing decisions would also “lead to nonsensical results,” the majority wrote.

For those interested in appellate procedure, Kennedy is also interesting in that it was decided as an interlocutory appeal rather than following entry of final judgment. Additionally, the dissenting judge, who would have discharged jurisdiction and not decided the issue presented, was one of the Fourth Circuit judges who earlier voted to grant interlocutory review in the case.

In an opinion with potentially far reaching effects, the United States Court of Appeals for the Ninth Circuit determined in Solis v. State of Washington, Department of Social & Health Services that a group of Washington social workers working in the field of dependency/child in need of care (child abuse and neglect) are not exempt from the overtime compensation requirements of the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201, et seq. (FLSA). The their responsibilities of the social workers included investigating child abuse and neglect, developing and recommending appropriate treatment plans to courts, evaluating child and family progress in meeting treatment plans, making placement decisions, and recommending whether parental
rights should be terminated.

The Ninth Circuit reversed a lower court’s order granting summary judgment to the Washington agency that employed the social workers, which had relied in large part on a Pennsylvania federal court decision holding truancy prevention case managers, who were required to have a bachelor’s degree in social work, human services, or a related field, plus three years of work experience, came within the “learned professional” exemption. The Ninth Circuit stated:

The court found the class of Washington social workers different from a group deemed exempt by the Department of Labor because the other group required more specialized education and specified work experience. Because “FSLA exemptions are construed narrowly against employers and “are to be withheld except as to persons plainly and unmistakably within their terms and spirit,” the Ninth Circuit found the broad range of degrees accepted by the Washington agency failed to satisfy the learned professional exemption from overtime requirements. The court cited decisions from a number of other courts in support of its holding, including a decision by the United States Court of Appeals for the Eleventh Circuit in Dybach v. State of Florida Department of Corrections, 942 F.2d 1562 (11th Cir. 1991), where the 11th Circuit “held that probation officers, who were required to have a bachelor’s degree in any field, including “nuclear physics” or “basketweaving,” id. at 1565-66, did not qualify for the “learned professional” exemption despite a requirement of one year of prior experience in law enforcement or corrections.”

Ouch. Or, as the court said in its conclusion, “[b]y failing to comply with its basic discovery obligations, a party can snatch defeat from the jaws of certain victory.” e360 Insight, Inc. v. The Spamhaus Project, Nos. 10-3538 & 10-3539 (7th Cir. Sept. 2, 2011) might also be said to illustrate application of the Pig Rule: Hogs get fat; pigs get slaughtered. Whatever one calls it, the decision by the Seventh Circuit Court of Appeals in e360 stands as a clarion call for reasonableness – reasonable diligence, reasonable lawyering, and reasonable expectations.

The case involved claims for alleged tortious interference with contractual relations, tortious interference with prospective economic advantage, and defamation. The defendant removed the case to federal court, then withdrew its answer and allowed a default judgment to be rendered. When the district court entered judgment for $11,715,000 – that’s right, almost $12 million – the defendant changed its mind and decided to litigate the issue of damages. An earlier appeal of the original default judgement resulted in an opinion reversing the original damage award.

During the course of the proceedings on remand, e360 failed to cooperate with discovery. The district court ordered the plaintiff to supplement its interrogatory responses two times. After the plaintiff failed to comply a third time, Spamhaus moved for dismissal. The district court declined to dismiss and afforded the plaintiff another opportunity to supplement its interrogatory responses, which it did by adding 16 witnesses and inflating its damage claim to more than $135 million. The district court declined to dismiss the action but sanctioned e360 by striking its 16 new witnesses and ordering that the plaintiff could not claim more than the $11.7 million it initially sought. At trial, the court also rejected a damages exhibit calculated as an end run around the order limiting the amount of damages claimed. It eventually awarded judgment for $27,002 – $27,000 for interference with contractual relations because the plaintiff did have three contracts with customers who, combined, paid $27,000 per month. The district court believed it was likely the customers would have continued their accounts with e360 for at least one more month, had Spamhaus not identified e360 as a spam marketer.

Both parties appealed. And while the title to this post tells the rest of the story, the opinion is worth reading. Suffice it to say the court of appeals affirmed all of the district court’s discovery orders and damage limitation rulings. It reversed, however, the district court’s award of $27,000 because that amount represented the plaintiff’s gross revenues rather than actual lost profits. “[G]ross revenue is generally not an appropriate measure of damages because revenue is calculated without regard to the costs the plaintiff incurred in the course of making that revenue.” Said the court, “Having squandered its opportunity to present its case, e360 must content itself with nominal damages on each of its claims, and nothing more.”

When must an objection to the qualification of an estate’s personal representative be filed? According to Hill v. Davis, No. SC10-823 (Fla. Sept. 1, 2011), an objection to the qualifications of a personal representative of an estate is barred if not filed within the three-month window authorized by section 733.212(3), Florida Statutes. An exception exists, the court said, where fraud, misrepresentation, or misconduct with regard to the qualifications is not apparent on the face of the petition or discovered within the statutory time frame. In Hill, the Supreme Court of Florida deemed the objection filed outside the three-month period untimely because fraud, misrepresentation, and misconduct were not alleged, and the factual basis for the objection was known to the challenger and could have been timely raised.

The court applied a most basic rule of statutory construction to reach its decision: when the meaning of the statute is clear, the “Court‟s task goes no further than applying the plain language of the statute.”