Case No. 18 -11869 UNITED STATES COURT OF APPEALS FOR THE .

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Case: 18-11869Date Filed: 08/08/2018Page: 1 of 33Case No. 18-11869UNITED STATES COURT OF APPEALSFOR THE ELEVENTH CIRCUITTROY HUBBARD, MARCUS JOHNSON, ANIBALALCANTARA, DEBBIE CORT, GERARD McCARTHY,JULIO LEATY and MARTIN CONROY,Defendants-Appellants,v.AMERICAN FAMILY LIFE ASSURANCECOMPANY OF COLUMBUS,Plaintiff-Appellee.On Appeal from the United States District Courtfor the Middle District of GeorgiaAPPELLANTS’ REPLY BRIEFDimitry Joffe(admitted pro hac vice)JOFFE LAW P.C.765 Amsterdam Avenue, 2CNew York, NY 10025917-929-1964Dimitry@joffe.lawCounsel for Appellants

Case: 18-11869Date Filed: 08/08/2018Page: 2 of 33CERTIFICATE OF INTERESTED PERSONSPursuant to the 11th Circuit Rule 26.1-1, Appellants provide the followingcertificate of interested persons (“CIP”):Aflac Incorporated (NYSE: AFL)Alcantara, AnibalAlston & Bird LLPAmerican Family Life Assurance Company of ColumbusAmerican Family Life Assurance Company of New YorkCassilly, LisaConroy, MartinCort, DebbieDavis Gillett Mottern & Sims LLCHarris, St. Laurent & Chaudhry LLPHubbard, TroyJoffe Law P.C.Joffe, DimitryLand, Clay (U.S.D.J.)Leaty, JulioLexstone Fund II L.P.McCarthy, GerardSims, JerrySt. Laurent, AndrewSuttle, BrooksVersus Funding Partners L.Pi

Case: 18-11869Date Filed: 08/08/2018Page: 3 of 33TABLE OF CONTENTSTABLE OF AUTHORITIES . . iiiARGUMENT AND CITATIONS OF AUTHORITY . . .1Preliminary Statement . . .1I.The Court has jurisdiction to review the January 3rd Orderde novo because it is included in the Notice of Appeal .3II.Appellants preserved their arguments for the appellatede novo review by raising them below .7III.Appellee mostly ducks the hard questions andkey concerns about the Arbitration Agreement . .13Conclusion .24Certificate of Compliance .26Certificate of Service .27ii

Case: 18-11869Date Filed: 08/08/2018Page: 4 of 33TABLE OF AUTHORITIESCasesAccess Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324 (11th Cir. 2004) . .11Barfield v. Brierton, 883 F.2d 923 (11th Cir. 1989) . 5Bartley v. Kim’s Enter. of Orlando, 568 F. App’x. 827(11th Cir 2014) . 11Berkson v. Gogo LLC, 97 F. Supp. 3d 359 (E.D.N.Y. 2015) . . 7, 9Bradshaw v. Reliance Std. Life Ins. Co., 707 F. App’x 599(11th Cir. 2017) .10, 12Branco v. S. Operations LLC, No. 17-23289-CIV, 2018 U.S. Dist. LEXIS121784 (S.D. Fla. July 19, 2018) . .20, 24Brennan v. Bally Total Fitness (“Brennan I”), 153 F. Supp. 2d 408(S.D.N.Y. 2001) . .17, 19Brennan v. Bally Total Fitness (“Brennan II”), 198 F. Supp. 2d 377(S.D.N.Y. 2002) .16, 19, 21Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359 (11th Cir. 2005) .22Campbell v. Wainwright, 726 F.2d 702 (11th Cir. 1984) .5Cannon v. S. Atlanta Collision Ctr., LLC, No. 1:11-CV-1030-TWT-ECS, 2012U.S. Dist. LEXIS 39979 (N.D. Ga. Feb. 27, 2012) .24Clotfelter v. Cabot Inv. Props., LLC, No. 5:10-cv-235-Oc-10GRJ,2011 U.S. Dist. LEXIS 33777 (M.D. Fla. Mar. 29, 2011). 18Cole v. Burns Int’l Sec. Servs., 105 F.3d 1465 (D.C. Cir. 1997) 23Dean Witter Reynolds, Inc. v. Fernandez, 741 F.2d 355 (11th Cir. 1984) . .12Desiderio v. NASD, 191 F.3d 198 (2d Cir. 1999) .13Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) 16Gillman v. Chase Manhattan Bank, 73 N.Y.2d 1 (1988) .14iii

Case: 18-11869Date Filed: 08/08/2018Page: 5 of 33Green v. DEA, 606 F.3d 1296 (11th Cir. 2010) . .5Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79 (2000) .16Iberia Credit Bur., Inc. v Cingular Wireless LLC, 379 F.3d 159 (5th Cir. 2004).22In re Estate of Friedman, 64 A.D.2d 70 (N.Y. App. Ct. 2d Dep’t 1978) . .16Irving v. Mazda Motor Corp., 136 F.3d 764 (11th Cir. 1998) . .11Jackson v. Cintas Corp., No. 1:03-CV-3104-JOF, 2004 U.S. Dist. LEXIS31423 (N.D. Ga. Aug. 13, 2004) . 18Jones v. Preuit & Mauldin, 808 F.2d 1435 (11th Cir. 1987) 5Lynn v. Sheet Metal Workers’ Int’l. Assoc., 804 F.2d 1472 (9th Cir. 1986) .5Laka v. Aflac New York, No. 651809/2018 (N.Y. Sup. Ct. July 27, 2018) . 14Larsen v. Citibank FSB, 871 F.3d 1295 (11th Cir. 2017) .6, 23KH Outdoor, LLC v. City of Trussville, 465 F.3d 1256 (11th Cir. 2006) .4McDougald v. Jenson, 786 F.2d 1465, 1474 (11th Cir. 1986) . .5Mitsubishi Motors Corp. v. Solar Chrysler-Plymouth, Inc.,473 U.S. 614 (1985) .15NEC Techs., Inc. v. Nelson, 267 Ga. 390, 478 S.E.2d 769 (Ga. 1996) .18Osterneck v. E.T. Barwick Indus., Inc., 825 F.2d 1521 (11th Cir. 1987) . .5Paladino v. Avnet Comp. Tech., Inc., 134 F.3d 1054 (11th Cir. 1998) . .3Pugliese v. Pukka Dev., Inc., 550 F.3d 1299 (11th Cir. 2008) . . .10Ragone v. Atlantic Video, 595 F.3d 115 (2d Cir. 2010) .15Ramirez v. Secretary, 686 F.3d 1239 (11th Cir. 2012) .11, 12Roofing & Sheet Metal Servs., Inc. v. La Quinta Motor Inns, Inc.,689 F.2d 982 (11th Cir. 1982) . 11iv

Case: 18-11869Date Filed: 08/08/2018Page: 6 of 33Rosenberg v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 170 F.3d 1(1st Cir. 1999) . .22Sablosky v. Gordon Co., 73 N.Y.2d 133 (N.Y. 1989) . .22, 24Sierra v. Isdell, No. 6:09-cv-124-Orl-19KRS, 2009 U.S. Dist. LEXIS 66148(M.D. Fla. July 21, 2009) 20Smith v. Barry, 502 U.S. 244 (1992) .4Tatum v. SFN Group Inc., 698 F. App’x 1000 (11th Cir. 2017) . 11Ting v. AT&T, 319 F3d 1126 (9th Cir. 2003) .23United States v. Fawcett, 522 F. App’x 644 (11th Cir. 2013) .6Watson v. Waffle House, 253 Ga. 671 (1985) .18Yee v. City of Escondido, Cal., 503 U.S. 519, 534 (1992) .10Zhu v. Hakkasan, 291 F. Supp. 3d 378 (S.D.N.Y. 2017) . .17Zuver v. Airtouch Comm., Inc., 153 Wash.2d 293, 103 P.3d 753 (2004) .23RulesFed. R. App. P. 3(c)(1)(B) 4v

Case: 18-11869Date Filed: 08/08/2018Page: 7 of 33ARGUMENT AND CITATIONS OF AUTHORITYPRELIMINARY STATEMENTThe record on appeal demonstrates that Appellee commenced this Action by(a) making false factual statements in its verified state court complaint -- thenwithdrawing them after admitting their falsity; (b) filing court papers in directbreach of the Arbitration Agreement itself – then admitting that breach; (c)obtaining a facially suspect ex parte TRO – then justifying it by making falsestatements to the District Court about a non-existing “transference order.”Appellee has made all those missteps in the space of just 24 days inDecember 2017, in a rush to enforce its unconscionable Arbitration Agreementsagainst Appellants. Appellee’s high-pressure tactics and/or deceptive conduct inenforcing its Agreement mirror the high-pressure tactics and/or deceptive conductAppellee had used in coercing Appellants to accept its unconscionable Agreementin the first place.Appellants, for their part, have consistently challenged the ArbitrationAgreement’s unconscionability before the District Court in the proceedings below,and have now appealed the District Court’s resolution of that sole issue (amongseveral argued below) to this Court for a de novo review of their arguments.For procedural unconscionability, Appellants principally argue that highpressure tactics and/or deceptive conduct used by Appellee, the stronger bargaining1

Case: 18-11869Date Filed: 08/08/2018Page: 8 of 33party, left Appellants, the weaker parties, with no meaningful choice but to acceptAppellee’s Arbitration Agreement without any reasonable opportunity to review,understand, or negotiate its onerous terms.For substantive unconscionability, Appellants principally argue that (a)Appellee’s prohibitive fee allocation scheme impermissibly saddles Appellantswith high arbitration costs and forecloses any opportunity for them to effectivelyvindicate their federal statutory rights, and (b) the severe one-sidedness of theAgreement uniformly favoring Appellee in substantive dimensions renders itunconscionable. The one-sided features of the Arbitration Agreement include: a carve-out of all material claims by Aflac against the associate fromthe scope of the arbitration agreement (paragraph 10.1); See, e.g.,Appx. Vol. I, Doc. 10-2, Ex. 1, p. 21; contractual language making clear that Appellee is not a“Complaining Party” initiating arbitration under the Agreement(paragraph 10.2); Id. at pp. 21-22; a one-sided obligation of Appellants to arbitrate all disputes not onlywith Aflac but also with Aflac’s numerous affiliates regardless ofwhether Aflac itself is a party (paragraph 10.2); Id. at pp. 21-22; a one-sided limitation on Appellee’s and its affiliates’ liability, leavingAppellants’ liability unlimited (paragraph 10.7.1, 2); Id. at p. 23; and a strict confidentiality provision favoring Appellee as a repeatarbitration player (paragraph 10.2). Id. at p. 22.Finally, Appellants argue that these unconscionable features pervade theAgreement and collectively represent an integrated scheme to deny Appellants any2

Case: 18-11869Date Filed: 08/08/2018Page: 9 of 33opportunity to vindicate their federal statutory rights, to deter them fromchallenging Aflac’s unlawful practices, and to shield those unlawful practices fromjudicial or public scrutiny. These features “taint the entire arbitration agreement,rendering the agreement completely unenforceable, not just subject to judicialreformation” as an “integrated scheme to contravene public policy.” Paladino v.Avnet Comp. Tech., Inc., 134 F.3d 1054, 1058 (11th Cir. 1998).In response, Appellee predominantly argues that Appellants have waivedtheir arguments on procedural grounds, either because Appellants purportedlyfailed to include the District Court’s order compelling arbitration in their Notice ofAppeal, and/or because they supposedly did not raise these challenges before theDistrict Court and did not preserve them for appellate review. These arguments arerefuted in Parts I and II below, respectively.As to the merits of Appellants’ arguments, Appellee mostly ducks the hardquestions and key concerns about its Arbitration Agreement. See Part III below.I.The Court has jurisdiction to review the January 3rdOrder de novo because it is included in the Notice of Appeal.Contrary to the Appellee’s contention, this Court has jurisdiction to reviewthe January 3rd Order on several grounds.First, Appellants did include the January 3rd Order in their Notice ofAppeal, which expressly references “an order compelling arbitration entered onJanuary 3, 2018.” Doc. 24. The reference, Appellants admit, might have been3

Case: 18-11869Date Filed: 08/08/2018Page: 10 of 33worded better, but their intent to appeal the issue of the Agreement’s enforceabilitydecided by that Order is clear; indeed, Appellants appealed solely the issue of theunconscionability, and their Initial Brief is dedicated exclusively to that issue. SeeKH Outdoor, LLC v. City of Trussville, 465 F.3d 1256, 1260 (11th Cir. 2006)(“Although the second notice of appeal could have been more artfully drawn, aliberal construction of that notice requires us to conclude that the city haseffectively appealed the district court’s determination . . . .”).Indeed, while Rule 3(c)(1)(B) of the Federal Rules of Appellate Procedurerequires the appellant to “designate the judgment, order, or part thereof beingappealed,” the Supreme Court requires the Courts of Appeals to “liberally construethe requirements of Rule 3.” Smith v. Barry, 502 U.S. 244, 248, 112 S. Ct. 678, 116L. Ed. 2d 678 (1992). “[I]n this circuit, it is well settled that an appeal is not lost ifa mistake is made in designating the judgment appealed from where it is clearthat the overriding intent was effectively to appeal.” KH Outdoor, 465 F.3d at1260 (emphasis added throughout). The liberal construction mandate “has resultedin the liberal allowance of appeals from orders not expressly designated in thenotice of appeal, at least where the order that was not designated was entered prior4

Case: 18-11869Date Filed: 08/08/2018Page: 11 of 33to or contemporaneously with the order(s) properly designated in the notice ofappeal.” McDougald v. Jenson, 786 F.2d 1465, 1474 (11th Cir. 1986). 1Second, the Notice of Appeal explicitly states that the appeal is “from . . . thefinal judgment entered on January 4, 2018.” Doc. 24. Appellants’ appeal from thefinal judgment brings up for the appellate review the January 3rd Order thatproduced it. “[T]he appeal from a final judgment draws in question all prior nonfinal orders and rulings which produced the judgment.” Barfield v. Brierton, 883F.2d 923, 930-931 (11th Cir. 1989); see also Jones v. Preuit & Mauldin, 808 F.2d1435, 1438 n.1 (11th Cir. 1987) (when reviewing an appeal from a final judgment,this court can review rulings on previous interlocutory orders); Osterneck v. E.T.Barwick Indus., Inc., 825 F.2d 1521, 1530 (11th Cir. 1987) (same). 21See also Green v. DEA, 606 F.3d 1296, 1299 (11th Cir. 2010) (“When it isabundantly clear that the party intended to appeal an order not explicitly referencedin the notice of appeal, we will consider that order”); Campbell v. Wainwright, 726F.2d 702, 704 (11th Cir. 1984) (noting that the Court liberally construes the noticeof appeal in favor of the appellant “where the intent to appeal an unmentioned ormislabeled ruling is apparent and there is no prejudice to the adverse party”); Lynnv. Sheet Metal Workers’ Int’l. Assoc., 804 F.2d 1472, 1481 (9th Cir. 1986) (“[A]mistake in designating the judgment appealed from should not bar appeal as longas the intent to appeal a specific judgment can be fairly inferred and the appellee isnot prejudiced by the mistake.”).2The cases cited by Appellee on pages 17-18 of its brief are distinguishablebecause the appellants there did not include the final judgment in their notices ofappeal. In addition, the facts underlying the cases are different because here, asdiscussed below, “the overriding intent” to appeal the January 3rd Order isapparent on the face of the Notice of Appeal.5

Case: 18-11869Date Filed: 08/08/2018Page: 12 of 33Third, the Notice of Appeal also designates the District Court’s January 25thOrder denying Appellants’ Motion for Reconsideration of the January 3rd Order,and “when an appellant designates an order denying a post-judgment motion in thenotice of appeal, the scope of appeal may extend to the underlying judgment ororder.” United States v. Fawcett, 522 F. App’x 644, 649 (11th Cir. 2013).Here, Appellants clearly intended to appeal the January 3rd Order that theArbitration Agreement is enforceable – it is the only ground for their appeal(among several advanced below), and Appellants’ Initial Brief is devotedexclusively to that issue as the Notice of Appeal, liberally construed, hadadequately noticed for purposes of Rule 3. Thus, even assuming that the January3rd Order was not mentioned in the Notice of Appeal (which it was), Appellants’manifest intent was to appeal that Order. Moreover, Appellee did not show (norcould it show) any prejudice from that purported omission as it had full opportunityto challenge these arguments in its response brief.Thus, the Court has jurisdiction to review Appellants’ unconscionabilityarguments de novo. See Larsen v. Citibank FSB, 871 F.3d 1295, 1308-09 (11th Cir.2017) (“We review each argument [that the arbitration agreement isunconscionable] de novo.”).6

Case: 18-11869II.Date Filed: 08/08/2018Page: 13 of 33Appellants preserved their arguments for theappellate de novo review by raising them below.The Appellee’s contention that Appellants failed to preserve their argumentsbefore the District Court that arbitration provision is “unenforceable on grounds itis unconscionable” is belied by the record, which manifestly shows that Appellantshad consistently raised and preserved the unconscionability issue below for thisCourt’s de novo review.First, in their brief to the District Court (Doc. 13 at pp. 17-18), Appellantsargued -- among other grounds for opposing Appellee’s motion – that “they havegood grounds to challenge Aflac’s Arbitration Agreement on substantive andprocedural unconscionability”:Aflac’s arbitration agreement (i) is unconscionably one-sided asit carves out from its scope most of the claims by Aflac againstthe associate -- but the associate must arbitrate any and all ofher own disputes (see paragraph 10.1, which carves out all thematerial claims by Aflac (“Except for an action by Aflac toenforce the provisions contained in Paragraphs 1.4, 3, 8, 10.5 or10.6,”); (ii) saddles the associate with arbitration costs, makingarbitration financially burdensome for the associate (seeparagraph 10.2); and (iii) is signed electronically and may havenever been seen by the associate signing it, among other things.See, e.g., Berkson v. Gogo LLC, 97 F. Supp. 3d 359, 390-92(E.D.N.Y. 2015). Defendants further respectfully submit thatthe Complaint should be dismissed based on Plaintiff’s ownnon-compliance with the Arbitration Agreements as a thresholdmatter; should the Court reach the issue of theunconscionability of the Arbitration Agreements themselves,Defendants respectfully submit that its resolution should awaitthe Supreme Court’s ruling in Epic Systems, which may as wellobviate any need to decide this issue.7

Case: 18-11869Date Filed: 08/08/2018Page: 14 of 33Second, Appellants raised these very issues of unconscionability during oralargument on Appellee’s motion to compel, and offered to provide the DistrictCourt with more authorities supporting their position (Doc. 21 at pp. 6-9):MR. JOFFE: The other argument was that the arbitrationagreement itself is substantively and procedurallyunconscionable. We made the point on pages 17 and 18 of ourmemorandum of law in footnote. So this is an additionalargument that the agreement, arbitration agreement, inAFLAC’s associates agreement is -- first of all, it’s one-sidedbecause it actually carves out most of the claims by AFLACagainst the associate, those expressly carved out of arbitration,but the associate herself must bring all of the disputes againstAFLAC through arbitration. So this is one reason it’s very onesided. Secondly -THE COURT: Well, let me make sure I understand that. Areyou suggesting that there are claims that an associate, anAFLAC associate, would have against AFLAC that they have tobring through arbitration and through no other process, and yetthe arbitration procedures do not recognize that as a viableclaim?MR. JOFFE: No. What I’m saying is: An associate must bringany and all of associate’s disputes with AFLAC to arbitrationaccording to the arbitration agreement. AFLAC, however,doesn’t have to. All of the material claims by AFLAC againstassociates are carved out. So the associate agreement is one –the arbitration agreement is one-sided.THE COURT: But you agree that there is a remedy for -potential remedy for any claim that an associate may have in thearbitration forum.MR. JOFFE: Yes. The associate is limited to the arbitrationforum while AFLAC is not limited -THE COURT: All right.MR. JOFFE: -- to arbitration. And there are other couple of -THE COURT: Have you cited any cases that support yourargument of unconscionability based upon the arbitration8

Case: 18-11869Date Filed: 08/08/2018Page: 15 of 33agreement requiring one side to arbitrate all the claims and yetgiving the other side the option not to arbitrate certain claims?MR. JOFFE: Your Honor, I cited one, a recent decision byEastern District of New York. It’s Berkson v. Gogo LLC, 97 F.Supp. 3d 359. It’s a decision by Jack Weinstein where he goesthrough the factors that would make an arbitration agreementsubstantively and procedurally unconscionable. And it dealswith onesidedness[,] with the burdensome financial burden onthe associate who have to pay for

Case No. 18 -11869 _ UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT _ TROY HUBBARD, MARCUS JOHNSON, ANIBAL ALCANTARA, DEBBIE CORT, GERARD McCARTHY, JULIO LEATY and MARTIN CONROY, Defendants-Appellants, v. AMERICAN FAMILY LIFE ASSURANCE COMPANY OF COLUMBUS, Plaintiff-Appellee. _ On Appeal from the United States District Court

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