IN THE SUPREME COURT OF FLORIDA

Transcription

1 IN THE SUPREME COURT OF FLORIDA CBS RADIO STATIONS, INC. f/k/a INFINITY RADIO, INC., vs. Appellant/Petitioner, Case Nos. SC , SC (consolidated) L.T. Case No. 4D ELENA WHITBY, a/k/a JENNIFER ROSS, JAMES CRYSTAL LICENSES, LLC, JAMES CRYSTAL HOLDINGS, INC., and JAMES CRYSTAL ENTERPRISES, LLC, Appellees/Respondents. / APPELLEES, JAMES CRYSTAL LICENSES, LLC, JAMES CRYSTAL HOLDINGS, INC. S AND JAMES CRYSTAL ENTERPRISES, LLC S BRIEF ON JURISDICTION HAILE, SHAW & PFAFFENBERGER, P.A. 660 U.S. Highway One, Third Floor North Palm Beach, FL Phone: (561) Fax: (561) Attorneys for Appellees/Respondents James Crystal Licenses, LLC, James Crystal Holdings, Inc., and James Crystal Enterprises, LLC

2 TABLE OF CONTENTS TABLE OF CITATIONS... ii INTRODUCTION... 1 STATEMENT OF CASE AND FACTS... 2 ARGUMENT... 4 I. THE COURT DOES NOT HAVE MANDATORY APPELLATE JURISDICTION BECAUSE THE DISTRICT COURT DID NOT HOLD A STATUTE INVALID... 4 II. THE COURT DOES NOT HAVE DISCRETIONARY JURISDICTION TO REVIEW THE FOURTH DISTRICT S DECISION A. THE DECISION DID NOT EXPRESSLY CONSTRUE THE FEDERAL CONSTITUTION S DUE PROCESS PROVISION... 5 B. THE DECISION DID NOT CREATE A CONFLICT REGARDING THE IMPOSITION OF NOMINAL DAMAGES... 6 C. THE COURT SHOULD NOT EXERCISE ITS DISCRETION IN THIS GARDEN VARIETY NON-COMPETE CASE... 8 CONCLUSION... 9 CERTIFICATE OF SERVICE...11 CERTIFICATE OF COMPLIANCE...12 i

3 TABLE OF CITATIONS CASES Bevelry Health and Rehabilitation Services, Inc. v. Freeman, 709 So. 2d 549, 552 (Fla. 2 nd DCA 1998)... 7 Beverage Canners, Inc. v. Cott Corp., 372 So. 2d BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996)... 4 Cason v. Baskin, 30 So. 2d 635 (Fla. 1947)... 6 Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006)... 4 James Crystal Licenses, LLC v. Infinity Radio, Inc., 43 So. 3d 68 (Fla. 4 th DCA 2010)... 1 John Brown Automation, Inc. v. Nobles, 537 So. 2d 614, 617 (Fla. 2d DCA 1988)... 8 State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003)... 4 Whitby v. Infinity Radio, Inc, 951 So. 2d 890 (4 th DCA 2007)... 2 Young v. Johnson, 475 So. 2d 1309 (Fla. 1 st DCA 1985)... 6 ii

4 MISCELLANEOUS Art V, 3(b)(1), Florida Constitution...4 Art V, 3(b)(3)-(4), Florida Constitution...5 iii

5 INTRODUCTION CBS Radio Stations, Inc. ( CBS ) attempts to invoke the jurisdiction of this Court by mischaracterizing the opinion of the Fourth District Court of Appeal for which it seeks review, James Crystal Licenses, LLC v. Infinity Radio, Inc., 43 So. 3d 68 (Fla. 4 th DCA 2010)( Whitby II ). The District Court did not as a matter of Federal due process, [prohibit] punitive damages awards against business competitors who cause merely economic damages. (CBS Brief, p.1) Nor did the District Court effectively [gut] Florida s non-compete statute by precluding nominal damages. (CBS Brief, p.1) This case involves merely a garden variety covenant not-to-compete dispute between competitors in a highly competitive industry, radio broadcasting. It involves one isolated incident between two radio stations in the Palm Beach metro market and one radio personality. CBS obtained a temporary injunction against that radio personality for one year and should have ceased litigating thereafter, but chose to seek millions in damages. After two jury trials, judgment has now been entered against CBS pursuant to the mandate of the District Court. Now, after ten years of litigation, CBS is making this last ditch attempt to salvage something. 1

6 STATEMENT OF CASE AND FACTS The facts are set forth in the opinion of the District Court, Whitby II. However, there are certain facts not set forth by CBS which bear mentioning, and certain assertions of CBS regarding the case which are quite simply wrong. To begin, it is undisputed that CBS is one of the largest owners and operators of radio stations in the world. It is likewise undisputed that corporate Appellees owned radio station WRMF in the Palm Beach metro market and were part of a small independent group of about eight radio stations. It is plain that the economic disparity between CBS and corporate Respondents was great. CBS begins its misstatements of the facts and the case by wrongly claiming that it prevailed in the first trial, obtaining injunctive relief against Whitby and James Crystal Licenses. (CBS Brief, p.2) In fact, CBS only obtained a temporary injunction for one year, which expired by its terms. (Whitby II, p.2) CBS never attempted to prove its final entitlement to that injunction at trial, and amended its complaint a second and third time before trial, but did not assert an injunctive claim against corporate Respondents. Thus, CBS did not obtain a judgment finally entitling it to the temporary injunction, and nowhere does the opinion of the District Court suggest or hold otherwise. CBS also incorrectly states that the District Court held in Whitby v. Infinity Radio, Inc, 951 So. 2d 890 (4 th DCA 2007) ( Whitby I ) that CBS had presented 2

7 competent substantial evidence regarding $400,000 - $600,000 in advertising losses. (CBS Brief, pp.2-3) CBS misreads Whitby I. That Court did not find as a matter of law that there was substantial competent evidence to support some compensatory damages which have been directly linked to Whitby s departure from CBS. Whitby I merely suggested that if the evidence regarding lost profits in certain accounts had been directly linked to Whitby s departure from WEAT, then it would have been substantial competent evidence. This was a big if, which was made clear when the Court stated: [t]herefore, on remand, Infinity is not precluded from once again attempting to prove compensatory damages. However, there must be substantial competent evidence directly linking those damages to Appellants activities during the seven months between Whitby s departure from WEAT and the trial court s entry of the temporary injunction. (Whitby I, 951 So. 2d at 900 (emphasis added)) It was not, as CBS implies, a foregone conclusion that CBS would be able to establish the causal link, which of course, it did not. Finally, CBS asserts that the District Court concluded in Whitby II that punitive damages could not be awarded at all in a non-compete case involving economic injuries among business competitors because they lack the level of reprehensibility required for a punitive damage award. (CBS Brief, p.3) As explained more fully below, the District Court did not so hold. 3

8 ARGUMENT I. THE COURT DOES NOT HAVE MANDATORY APPELLATE JURISDICTION BECAUSE THE DISTRICT COURT DID NOT HOLD A STATUTE INVALID The Court does not have mandatory appellate jurisdiction under Art. V, 3(b)(1), Fla. Constitution because the District Court did not declare a state statute invalid. The District Court never addressed the constitutionality of (1)(c), Fla. Stat. (1999), facially or as applied. Moreover, the District Court never held that punitive damages cannot be awarded for intentional interference with a competitor s non-compete agreement, as CBS asserts. (CBS Brief, p.6) Furthermore, there was no proven harm or actual damage (which is an element of a tortious interference case, as the District Court held), therefore, the award of punitive damages failed for that reason alone as the District Court held. Whitby II, p.8. The District Court went on to also address the issue of the excessiveness of the punitive damages award, applying the three-part analysis articulated in State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003) ( State Farm ) and BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996) ( Gore ), and adopted by this Court in Engle v. Liggett Group, Inc., 945 So. 2d 1246 (Fla. 2006) ( Engle ). The District Court s de novo review lead it to conclude that the conduct here did not reach the level of reprehensibility required for a punitive 4

9 damages award (Whitby II, p.12), and that the proportionality of the punitive damage award to the compensatory damages, which was $6.9 million dollars to zero (an infinite proportion) ( Whitby II, p. 13), caused the District Court to conclude that the punitive damage award was unsustainable. Such a conclusion, however, was not a declaration that Section (1)(c) was unconstitutional. II. THE COURT DOES NOT HAVE DISCRETIONARY JURISDICTION TO REVIEW THE FOURTH DISTRICT S DECISION. Article V, 3(b)(3) (4) of the Florida Constitution provides that this Court has discretionary jurisdiction to review decisions of district courts of appeal that expressly construe a provision of the federal constitution, or expressly and directly conflict with a decision of this Court or another district court. In the instant case, discretionary jurisdiction does not lie. A. THE DECISION DID NOT EXPRESSLY CONSTRUE THE FEDERAL CONSTITUTION S DUE PROCESS PROVISION The opinion of the District Court did not construe or interpret the Due Process Clause. The District Court merely applied the three-part analysis set forth in State Farm and Gore and as required by this Court in Engle. Moreover, the District Court did not hold, as CBS represents, that the Due Process Clause [precluded] punitive damages where someone induces a competitor s employee to violate a non-compete agreement, resulting in only economic loss even if the 5

10 person intended to harm the plaintiff. (CBS Brief, p.7) The decision addressed the particular facts of this case, and did not hold as CBS suggests. B. THE DECISION DID NOT CREATE A CONFLICT REGARDING THE IMPOSITION OF NOMINAL DAMAGES None of the cases cited by Appellant involve a breach of non-compete agreement, and therefore, are not applicable. Cason v. Baskin, 30 So. 2d 635 (Fla. 1947) involves a slander cause of action; Beverage Canners, Inc. v. Cott Corp., 372 So. 2d 954, involves a breach of franchise agreement; and Young v. Johnson, 475 So. 2d 1309 (Fla. 1 st DCA 1985) involves a contract relating to the building of a home. 1 In each of the three cases cited by Appellant, the courts do hold that once you establish a breach of contract, then nominal damages may be awarded. However, in the instant case, Appellant sued for breach of a non-compete agreement, which is a governed by a statute, Section , Florida Statutes. Under Section , Florida Statutes, unlike breach of contract cases, there is a remedy provided if you cannot prove damages. Specifically, Section (1)(j) provides that a court can enforce a restrictive covenant by a temporary and permanent injunction, and the violation of an enforceable restrictive covenant 1 Appellant also cites Imperial Majesty Cruise Line, LLC v. Weitnauer Duty Free, Inc, 987 So. 2d 706 (Fla. 4 th DCA 2008) as allegedly why the trial court ordered a judgment against CBS, and did not award nominal damages for the breach of non-compete agreement. However, nothing could be further from the truth. The Fourth District Court of Appeal cited Imperial Majesty as authority for why it found that the tortious interference alleged against the Companies did not reach the level of reprehensibility required for a punitive damage claim. 6

11 creates a presumption of irreparable injury to the person seeking enforcement of a restrictive covenant. In the instant case, Appellant sought and obtained a temporary injunction based on an alleged breach of the non-compete agreement. Had Appellant been able to prove actual damages as a result of the alleged breach of non-compete agreement, it could have obtained that remedy as well. However, in the absence of proof of actual damages, Appellant s remedy remains injunctive relief pursuant to the statute. Had the legislature intended that a breach of the non-compete agreement alone, without the proof of actual damages, should be compensated by nominal damages, it would have specifically provided for such in the statute. See Bevelry Health and Rehabilitation Services, Inc. v. Freeman, 709 So. 2d 549, 552 (Fla. 2 nd DCA 1998) (court cites to Sections and (5)(b) where the legislature specifically provides for nominal damage awards). In addition, assuming arguendo that nominal damages could be awarded in this case, which it could not, Appellant never requested jury instructions for nominal damages; never requested the trial court to award nominal damages; and never raised the issue in the brief it filed in the District Court, and therefore, waived the issue. 2 2 Appellant, did for the first time, raise the issue in its Motion for Rehearing in the Fourth District Court of Appeal. However, an issue cannot be raised for the first time in a Motion for Rehearing. Florida Rule of Appellate Procedure 9.330(a). 7

12 The Fourth District Court s decision is in conformity with, not in conflict with, the law in other Districts and this Court. C. THE COURT SHOULD NOT EXERCISE ITS DISCRETION IN THIS GARDEN VARIETY NON-COMPETE CASE Appellant s argument is non-sensical because it jumps to conclusions which are not warranted by the facts, law or judgment of the Fourth District Court of Appeal. First, Appellant argues that nominal damages must be awarded for breach of non-compete agreements and tortious interference so that the plaintiff can prevail and be awarded fees and costs and punitive damages. In addition, Appellant argues that the Court s decision forecloses employers from seeking punitive damages and grants wrongdoers immunity. First, even if nominal damages were awarded for breach of agreement, no punitive damages can be awarded in such cases. See John Brown Automation, Inc. v. Nobles, 537 So. 2d 614, 617 (Fla. 2d DCA 1988) (punitive damages for breach of contract are barred by Florida law). Nominal damages are not awarded in tortious interference cases because proof of actual damages is an element of a cause of action for tortious interference, so again there would be no basis for punitive damages. See Imperial Majesty Cruise Line, LLC. Accordingly, even if nominal damages could be awarded in this case, which they could not, they would not form a basis for a punitive damage award. 8

13 Second, the District Court did not find that employers are foreclosed from seeking punitive damages, or that the wrongdoers have immunity from punitive damages. The Fourth District Court found that in this particular case the level of wrongdoing did not rise to the level of the reprehensibility required for a punitive damage award. This decision will not affect future litigation in the future if an employer can prove its damages in a tortious interference cause of action involving a non-compete agreement, and the actions of that tortfeasor arises to the level of reprehensibility required for a punitive damage award, presumably the compensatory and punitive damages will be awarded. The Fourth District Court of Appeal s decision conforms to the statutory protection afforded non-compete agreements. A presumption of irreparable injury was afforded to the Appellant giving rise to the entry of a temporary injunction, and damages were not awarded because no actual damages were proven, which meant no punitive damages could be awarded. CONCLUSION This Court does not have jurisdiction in this matter. 9

14 Respectfully Submitted, HAILE, SHAW & PFAFFENBERGER, P.A. Attorneys for Appellees/Respondents JAMES CRYSTAL LICENSES, INC. JAMES CRYSTAL HOLDINGS, INC. JAMES CRYSTAL ENTERPRISES, LLC 660 U.S. Highway One, Third Floor North Palm Beach, FL Phone: (561) Fax: (561) By: Robert G. Haile, Jr., Esq. Fla. Bar No.:

15 CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing has been furnished by and U.S. Mail to: Matthew J. Conigliaro, Esq., Carlton Fields, P.A., 200 Central Avenue, Suite 2300, St. Petersburg, FL 33074, and Alan Rosenthal, Esq., Carlton Fields, P.A., 100 SE Second St., Suite 4200, Miami, FL , and David L. Gorman, Esq., 618 U.S. Highway One, Suite 303, North Palm Beach, FL this 7 th day of March, HAILE, SHAW & PFAFFENBERGER, P.A. Attorneys for Appellees/Respondents JAMES CRYSTAL LICENSES, INC. JAMES CRYSTAL HOLDINGS, INC. JAMES CRYSTAL ENTERPRISES, LLC 660 U.S. Highway One, Third Floor North Palm Beach, FL Phone: (561) Fax: (561) rhaile@hsplaw.com By: Robert G. Haile, Jr., Esq. Fla. Bar No.:

16 CERTIFICATE OF COMPLIANCE I HEREBY CERTIFY that the foregoing request was prepared using Times New Roman 14, in compliance with the font requirements set forth in rule 9.210(a)(2). Robert G. Haile, Jr., Esq. Fla. Bar No.: