Reply Brief — Nemesis Veritas, L. P. v. Toto

ia. ourt, US.

FILED

LY) MAY 1 4 2003

OFFICE OF THE CLERK | .

No. 02-1292

Supreme Court of the Anited States

October Term, 2002

NEMESIS VERITAS, L.P. f/k/a MCMAHAN & COMPANY

and D. BRUCE MCMAHAN,

Petitioners,

-against-

WILLIAM A. TOTO,

Respondent.

REPLY TO BRIEF IN OPPOSITION

PATTI E. EVANS

Counsel of Record

LEIGH R. ISAACS

ISAACS & EVANS, LLP

521 Fifth Avenue - 17th Floor

New York, New York 10175

(212) 292-4412

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TABLE OF CONTENTS

TABLE OF AUTHORITIES ...........:csssccsseeseseeeeseseneees il

RESPONDENT’S BRIEF DEMONSTRATES WHY

THE WRIT SHOULD BE GRANTED ...............-0esseeee+ 1

A. The Eleventh Circuit’s Improper Determination

Undermines A 60 Year Old Rule Concerning The

Choice-Of-law Analysis Required In Diversity

DID sitiiorescsccsmvcmensinrcesprizcnauemineseninvmnsnietniioes 1

B. The Eleventh Circuit’s Determination

Conflicts With A Determination Made By The

TN I os ivcsiitesaisnsereisimvuopiatiicnlincenenimnniinnt 2

CONCLUSION ccccseesensssosseocsveensvensnnesvenvesensavenosonsseoonons 4

TABLE OF AUTHORITIES

Cases: Pages

BDO Seidman v. British Car Auctions,

802 So.2d 366 (Fla. 4 DCA 2001) ....c.cesccsessesseesees 1,2,4

Boyd Rosene and Associates v. Kansas Municipal

Gas Agency, 123 F.3d 1351 (10 Cir. 1997) .......essese0e- 2

Boyd Rosene and Associates v. Kansas Municipal

Gas Agency, 174 F.3d 1115 (10" Cir. 1999) .....seseseee 3

Day & Zimmermann, Inc. v. Challoner,

423 US. 3, 96S. Ct. 167, 46 L.Ed2 3 (1975)...........0... 1

McMahan v. Toto, 256 F.3d 1120 (11™ Cir. 2001)

amended 311 F.3d 1077 (11™ Cir. 2002) ........e.cesseee0- 3,4

Statutes:

Fin. Stat. S76G TP ..xssicericissinmnniienaiipiamaiianaaaale 1,2

li

RESPONDENT’S BRIEF DEMONSTRATES WHY

THE WRIT SHOULD BE GRANTED

A. The Eleventh Circuit’s Improper

Determination Undermines A 60 Year Old

Rule Concerning The Choice-Of-Law

Analysis Required In Diversity Actions

Respondent admits that Fla. Stat. §768.79 is a state

substantive law and that the issue facing the Eleventh Circuit

in this diversity action was whether the substantive law of

Virginia or Florida applied (Resp. Brief p. 4). It also is

undisputed that, to determine which state’s law to apply, the

Eleventh Circuit was required to apply the forum state’s choice

of law rules. Day & Zimmermann, Inc. v. Challoner, 423 U.S.

3, 96 S. Ct. 167, 46 L.Ed2 3 (1975). See Resp. Brief p. 4.

Respondent does not and cannot deny that Virginia law, and

not Florida’s §768.79, would apply in this case had the

Eleventh Circuit applied Florida’s choice of law rules in

ascertaining which law to apply.

Respondent is wrong in asserting (Ibid.) that a federal

court is not required to follow a choice-of-law analysis when

the state court failed to do so. The case cited for this

proposition, Day & Zimmerman, supra, states exactly the

opposite (423 U.S. at 4-5, 96 Ct. at 168): “(T]he conflict-of-

laws rules to be applied by a federal court in Texas must

coniorm to those prevailing in the Texas state courts.***The

Court of Appeals in this case should identify and follow the

Texas conflicts rule. What substantive law will govern when

Texas’ rule is applied is a matter to be determined by the Court

of Appeals.” Thus, the holding in BDO Seidman v. British Car

Auctions, 802 So.2d 366, 368 (Fla. 4" DCA 2001), that Fla.

Stat. §768.79 “should be applied without engaging in a conflict

of laws analysis” because, according to the statute, it “applies

to ‘any civil action for damages filed in the courts of this

state’” is irrelevant in a federal diversity action since the issue

in the first instance is whether §768.79 applies at all.

Finally, it cannot be asserted that BDO Seidman

interpreted Florida’s choice-of-law rules. BDO specifically

refused to engage in any choice-of-law analysis.

Therefore, there is an urgent need for this Court to

correct the Eleventh Circuit’s misapprehension of the law so as

to prevent the undermining of a 60 year old rule concerning the

choice-of-law analysis required in diversity cases.

B. The Eleventh Circuit’s Determination

Conflicts With A Determination Made By

The Tenth Circuit

The Petition noted that the Eleventh Circuit’s failure to

employ a choice-of-law analysis in considering whether to

apply a state attorney fee statute in a diversity case conflicts

with a determination of the Tenth Circuit and that this is a

substantial reason for granting certiorari. In Boyd Rosene and

Associates v. Kansas Municipal Gas Agency, 123 F.3d 1351

(10" Cir. 1997)(En banc), the Tenth Circuit directed the lower

court to first apply the forum state’s choice-of-law rules in

determining which state’s law to apply in respect of the award

of attorney’s fees.

Respondent is wrong in contending that (Resp. Brief p.

4) “the Tenth Circuit followed the analysis mandated by the

forum state of Oklahoma” and that, therefore, no conflict exists.

In Boyd, the Tenth Circuit cited only federal case law in

requiring a choice-of-law analysis (123 F.3d at 1352-3):

First, in this circuit, the matter of

attorney’s fees in a diversity suit is substantive

and is controlled by state law. See Public Serv.

Co. of Colorado v. Continental Cas. Co., 26

F.3d 1508, 1520 (10" Cir. 1994); Missouri

Pacific RR. Co. v. Kansas Gas and Elec. Co.,

862 F.2d 796, 801 (10 Cir. 1988). Second, a

federal court sitting in diversity must apply the

substantive law of the state in which it sits,

including the forum state’s choice-of-law rules.

See Klaxon Co. v. Stentor Elec. Mfg. Co., 313

U.S. 487, 495-97, 61 S.Ct. 1020, 1021-22, 85

L.Ed. 1477 (1941); Barrett v. Tallon, 30 F.3d

1296, 1300 (10" Cir. 1994). ***[R]Jather than

automatically applying the law of the state

providing the substantive contract law, a district

court must first apply the forum state’s choice-

of-law rules in resolving attorney’s fees issues.

Importantly, respondent does not dispute the fact that

the forum state attorney fee statutes of Florida and Oklahoma

both require the assessment of attorney’s fees “In any civil

' The Tenth Circuit subsequently affirmed the lower court’s

determination on remand that Oklahoma’s attorney fee statute was

a substantive, not procedural, law for choice-of-law purposes and

that under Oklahoma choice-of-law principles, Kansas law which

governed the parties’ agreement controlled. Boyd Rosene and

Associates v. Kansas Municipal Gas Agency, 174 F.3d 1115 (10" Cir.

1999). The Tenth Circuit’s analysis is similar to the Eleventh

Circuit’s original decision in McMahan v. Toto, 256 F.3d 1120 (11"

Cir. 2001), amended 311 F.3d 1077 (11" Cir. 2002).

action”. However, the Tenth Circuit determined that the

statutory wording did not permit the ignoring of federal law

mandating a choice-of-law analysis as McMahan implicitly

held by relying on BDO Seidman. Accordingly, there is a

conflict between the Tenth and Eleventh Circuits.

CONCLUSION

The petition for writ of certiorari should be granted.

Dated May 14, 2003

Respectfully submitted,

Patti E. Evans

Counsel of Record

Leigh R. Isaacs

Isaacs & Evans, LLP

521 Fifth Avenue

17" floor

New York, NY 10175

(212) 292-4412