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Weil Wins Significant Eleventh Circuit Opinion on Federal Procedure for Farmers Insurance in Antitrust MDL

On March 6, 2020, in a decisive opinion interpreting 11th Circuit precedent and underscoring the import of federal procedure, the U.S. Court of Appeals for the Eleventh Circuit once again found in favor of the defendants in the antitrust multidistrict litigation (MDL) entitled In re Auto Body Shop Antitrust Litigation, this time in complaints filed in Utah, Indiana, and Mississippi. Weil client Farmers Insurance and various of its affiliates were defendants in the Utah action.

The MDL, centralized in Florida federal court, is comprised of dozens of cases across the country brought by auto repair shops alleging that Farmers and a number of other insurers artificially suppress reimbursement rates for auto body repairs, in violation of federal antitrust and state law. 

The significance of this particular Eleventh Circuit win lies in the nuanced mix of procedural and legal rationale applied by the court. For the Utah and Indiana actions in particular, the Eleventh Circuit’s opinion was focused on procedure. By way of background, in April 2015, the U.S. District Court for the Middle District of Florida dismissed without prejudice the First Amended Complaint in the Utah action, but set a deadline for an amended pleading. The Plaintiffs in the Utah action missed the deadline by a just a few days, however, and filed the Second Amended Complaint (SAC) late. The Plaintiffs in the Indiana action similarly filed an untimely SAC.

The Defendants in the Utah action, led by Weil, moved to strike Plaintiffs’ SAC, but the district court allowed the case to proceed, excusing the late filed pleadings. After the court granted a second dismissal with prejudice on the merits of the Plaintiffs’ SAC, which the Plaintiffs appealed, Defendants raised the question of jurisdiction again. The issue caught the eye of the Eleventh Circuit, which directed both parties to answer a series of questions relating to whether or not the appellate court had jurisdiction over the appeal of the dismissal of the SAC, given the complaint was filed late. 

Weil again took the lead, answering the Eleventh Circuit’s jurisdiction questions on behalf of the Defendants in the Utah action. As the Defendants explained, pursuant to governing Eleventh Circuit law, after the deadline to amend set by the district court’s April 27, 2015 order dismissing the First Amended Complaint, that order became final and appealable. See Hertz Corp. v. Alamo Rent-A-Car, Inc., 16 F.3d 1126, 1132 (11th Cir. 1994) (“Once the court has identified the date upon which the leave to amend expires, that expiration date becomes the date of the final order unless the court grants an extension of time upon consideration of a motion filed before the expiration date has passed.”) (emphasis added). Thus, the Defendants argued, Plaintiffs’ failure to timely file the SAC, coupled with their failure to move for an extension, had immediate, case-dispositive consequences.

After hearing oral argument, the Eleventh Circuit issued its opinion on March 6, 2020. With respect to the Utah and Indiana actions, the Court stated: “Under our precedent, the orders dismissing the first amended complaints in [these]  actions became final judgments when the deadline to amend expired. The district court never set aside those final judgments, so it was without jurisdiction to permit the amendments and to adjudicate the second amended complaints. We must vacate the orders that purported to do so.” The Eleventh Circuit further held that the district court erred in relying on Rule 6(b)(1)(B) to extend the time for the plaintiffs to file their SACs after the original deadlines expired, and for the first time, explicitly held that the rule does not permit post-judgment extensions of time. This opinion clearly demonstrates that the importance of legal procedure cannot be underestimated.   

The Weil team was led by Complex Commercial Litigation partner David L. Yohai. Assisting on the case at the district court level and in related appeals were Appellate Litigation and Complex Commercial Litigation Co-Head Gregory Silbert, Antitrust partner Eric S. Hochstadt, and Complex Commercial Litigation partner Luna Barrington.