The Eleventh Circuit reinstated a federal RICO case but approved the denial of a motion to remand it to state court under the Class Action Fairness Act (CAFA) in Blevins v. Aksut, No. 16-11585, 2017 WL 782288 (11th Cir. Mar. 1, 2017). The court’s opinion confirms that CAFA’s local-controversy provision, 28 U.S.C. § 1332(d)(4), does not strip…
Securities Private Offering Exemption Applies in SEC Enforcement Action
The Eleventh Circuit rejected the SEC’s narrow construction of registration exemptions in SEC v. Levin, 2017 WL 711018 (Feb. 23, 2017), reversing a grant of summary judgment to the defendant but still affirming a jury verdict for securities fraud on multiple counts. The defendant, George Levin, invested his personal funds in a Ponzi scheme that…
Security Is Secure, Even When It’s in Receivership
In 2009, the SEC filed an action against Arthur Nadel and others following the collapse of a Ponzi scheme. The district court appointed a receiver to administer the defendants’ property and business affairs “and take whatever actions are necessary for the protection of the investors.” The district court also established a bar date for creditors’…
Court SLAPPS Down Defamation Suit
The Eleventh Circuit upheld a district court’s rejection of a doctor’s libel and false advertising action challenging two articles highly critical of his novel medical treatments. In Edward Lewis Tobinick, MD v. Novella, 2017 WL 603832 (11th Cir. Feb. 15, 2017), the court upheld the district court’s orders striking state-law claims pursuant to California’s anti-SLAPP statute,…
Securities Law Judgment Excepted from Discharge
On the same day the court decided Appling (below), the Eleventh Circuit issued a second bankruptcy-discharge opinion, this time addressing one of the more obscure exceptions from discharge, § 523(a)(19)(A)’s exception for judgments for securities law violations. Lunsford v. Process Technologies Services, LLC (In re Lunsford), 2017 WL 603845 (11th Cir. Feb. 15, 2017). Judge…
Court Broadly Construes Bankruptcy Discharge Exception for Fraud
One of the most litigated issues in bankruptcy court is whether a discharge of a particular claim should be granted to a debtor who has committed fraud relating to the claim, a statutory discharge exception found in section 523(a)(2)(A) and (B) of the Bankruptcy Code. The statute establishes a dichotomy between fraudulent statements regarding the…
Insurer Liable for Intoxicated Employee’s Accident Under General Permissive Use Clause
An employee may be covered by an employer’s auto insurance policy as a permissive user even though the employee violates a company policy prohibiting driving while intoxicated. The Eleventh Circuit, in Great American Alliance Insurance Co. v. Anderson, 2017 WL 521560 (11th Cir. Feb. 8, 2017), assessed conflicting cases under Georgia law, but determined that a general permissive…
Federal Common Law Applies State Preclusion Rules to Judgments in Diversity Cases
The Eleventh Circuit cleaned up some conflicting precedent this week and confirmed that state-law rules determine the preclusive effect of judgments rendered by federal courts in diversity cases. In deciding that question in CSX Transportation, Inc. v. General Mills, Inc., 2017 WL 393704 (11th Cir. Jan. 30, 2017), the court reversed the district court’s judgment…
Health Savings Accounts not exempt from bankruptcy estate in Georgia
After the Georgia Supreme Court answered a certified question, the Eleventh Circuit held that health savings account (“HSA”) funds are not property exempt from the bankruptcy estate under Georgia law. In Mooney v. Webster, No. 15-11229 (11th Cir. Jan. 27, 2017), a Chapter 7 bankruptcy petitioner claimed the assets in her HSA account as exempt…
Florida STOLI policies have insurable interest
In consolidated Pruco Life Insurance Co. v. Wells Fargo Bank, N.A., 2017 WL 360512 (11th Cir. Jan. 25, 2017), the Eleventh Circuit applied guidance from the Florida Supreme Court and held that Stranger-Originated Life Insurance (“STOLI”) policies have an “insurable interest” as required by Florida Statute § 627.404, so a standard contractual provision limiting challenges…