Illoominate Media, Inc. v. Cair Florida, Inc. ( 2022 )

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[DO NOT PUBLISH]
In the
United States Court of Appeals
For the Eleventh Circuit
____________________
No. 22-10718
Non-Argument Calendar
____________________
ILLOOMINATE MEDIA, INC.,
A Florida Corporation,
LAURA LOOMER,
A Florida Individual,
Plaintiffs - Appellants,
versus
CAIR FLORIDA, INC.,
A Florida Corporation,
CAIR FOUNDATION,
A District of Columbia Corporation,
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2 Opinion of the Court 22-10718
Defendants - Appellees,
TWITTER, INC., et al.,
Defendants.
____________________
Appeal from the United States District Court
for the Southern District of Florida
D.C. Docket No. 9:19-cv-81179-RAR
____________________
Before WILSON, GRANT, and ANDERSON, Circuit Judges.
PER CURIAM:
Laura Loomer and her corporation, Illoominate Media, Inc.,
appeal the district court’s decision to adopt the order of a
magistrate judge compelling them to pay certain costs and
attorney’s fees to defendants CAIR Florida, Inc. and the CAIR
Foundation. Because both the district court and the magistrate
judge correctly interpreted and applied pertinent Florida law—and
as there is no need for an evidentiary hearing—we affirm.
I.
This suit over attorney’s fees and costs stems from
allegations that the CAIR Foundation and CAIR Florida, Inc.
(CAIR) had a hand in convincing Twitter to ban Loomer’s account.
CAIR removed the first amended complaint to federal court on
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August 22, 2019. 1 Counsel for Loomer and her corporation
(Illoominate) moved for a remand to state court the next day. In
its response two weeks later alleging fraudulent joinder of CAIR
Florida, Inc., CAIR filed a sworn statement from Nathan Bernard.
He explained that he pranked Illoominate by fabricating evidence
to convince “Loomer that CAIR Foundation was the reason
Twitter banned her account.” Illoominate Media, Inc. v. CAIR
Florida, Inc., 841 F. App’x 132, 135 (11th Cir. 2020). In the interim,
CAIR had filed a motion to dismiss in late August.
On October 2, 2019, CAIR sent Illoominate an “offer of
judgment” proposing to settle the entire case for a nominal $1,
including costs and attorney’s fees. Illoominate had 30 days to
respond. On October 22, the district court dismissed CAIR Florida
from the suit and scheduled a hearing on CAIR’s motion to dismiss
for November 18. Nevertheless, Illoominate chose litigation over
settlement. On October 31—shortly before the offer of judgment
deadline—Illoominate filed a response to CAIR’s motion to
dismiss, where it voluntarily dismissed all its claims except Count
II (for tortious interference with an advantageous business
relationship). Once the deadline passed, the district judge
dismissed the remaining claim at the November hearing, and this
1 This Court held, in affirming the motion to dismiss, that CAIR Florida, Inc.
was fraudulently joined to defeat diversity jurisdiction. Illoominate Media,
Inc. v. CAIR Florida, Inc., 841 F. App’x 132 (11th Cir. 2020). But CAIR Florida
incurred legal expenses before its dismissal, which it seeks to recoup alongside
the litigation expenses of the CAIR Foundation.
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Court affirmed the dismissal in December 2020. Illoominate
Media, 841 F. App’x at 137. On April 12, 2021, CAIR filed a motion
seeking reimbursement from Illoominate pursuant to a Florida law
requiring select parties who decline an offer of judgment to pay
their opponent’s reasonable costs and attorney’s fees. Fla. Stat. §
768.79(1).
The lower court referred the matter to a magistrate judge,
and both parties had the opportunity to brief the issue in full. The
magistrate judge issued an order granting CAIR’s motion for costs
and attorney’s fees, but reducing their magnitude to comport with
federal and state laws limiting recovery. Illoominate appealed to
the 11th Circuit again, though we dismissed for lack of a final
dispositive order to review. See Fed. R. Civ. P. 72(a) (codified at 28
U.S.C. § 636(b)(1)(A)) (granting magistrate judges the authority to
issue orders only regarding nondispositive matters); Illoominate
Media, Inc. v. CAIR Florida, Inc., 21-13018 (11th Cir. Nov. 9, 2021)
(dismissing the appeal because a magistrate judge’s actions while
proceeding under § 636(b) are not final appealable orders) (citing
Donovan v. Sarasota Concrete Co., 693 F.2d 1061, 1066–67 (11th
Cir. 1982)).
This (third) appeal flows from a motion Illoominate filed in
the district court in opposition to the magistrate judge’s order. The
district judge allowed CAIR to submit a written response to
Illoominate’s objections. In disposition, the district court adopted
the magistrate judge’s order in full, awarding CAIR recompense for
fees and expenses incurred while litigating all aspects of the case
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from October 2, 2019 (when the offer of judgment was made)
through the end of the first appeal. Illoominate now asks that we
review and reconsider.
II.
The district court properly exercised diversity jurisdiction,
and we have appellate jurisdiction under 28 U.S.C. § 1291. A
district judge reviewing a magistrate judge’s nondispositive order
“must consider timely objections and modify or set aside any part
of the order that is clearly erroneous or is contrary to law.” Fed. R.
Civ. P. 72(a). On appeal, we are bound by the same standard: we
review the district court’s application of law de novo, but its
findings of fact for clear error. Johnson & Johnson Vision Care, Inc.
v. 1-800 Contacts, Inc., 299 F.3d 1242, 1246 (11th Cir. 2002) (A
district court’s factual finding is “clearly erroneous when, although
there is evidence to support it, the reviewing court on the entire
evidence is left with the definite and firm conviction that a mistake
has been committed”) (quotation omitted).
III.
First, Illoominate claims that Florida’s cost-shifting law is
inapplicable because its suit was for both money damages and
injunctive relief. Fla. Stat. § 768.79(1); see also Diamond Aircraft
Indus., Inc. v. Horowitch, 107 So. 3d 362, 373 (Fla. 2013) (“Courts
have also held that when a plaintiff seeks both monetary and
nonmonetary relief, and a party makes a general offer of
settlement, section 768.79 is not applicable.”). In Illoominate’s
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view, all they “had a chance to do was plead, and they clearly pled
non-monetary relief.”
Not quite. The prayer for relief in Illoominate’s complaint
seeks “damages in an amount to be proved at trial” and (without
elaboration) “preliminary and permanent injunctions to prevent
defendants from continuing their unlawful conduct.” Yet as the
magistrate judge correctly pointed out, in the eight-and-a-half-
month period between the filing of the amended complaint and the
district court’s decision to dismiss, Illoominate “never filed a
motion for a preliminary injunction or temporary restraining
order” in state or federal court.
Nor could it have. Three of the four counts directed at CAIR
conclude that Illoominate has been injured in an “amount to be
proved at trial,” completely synonymous with the prayer for
relief’s phrasing of the damages claim. The fourth count, a
restraint of trade claim, does not specify the relief sought. But the
harm is phrased entirely in the past tense: Illoominate and Loomer
“have been injured in their business or property by reason of
defendants’ unlawful act.” There is no ongoing harm to be
enjoined. The request for injunctive relief only makes sense in the
context of Count I, which is directed solely against never-served
defendant Twitter. Illoominate seeks “recission or reformation of
those provisions of the Twitter Terms of Service which, as a matter
of equity, might otherwise prevent or limit this Court’s ability to
provide just and complete remedies for defendants’ unlawful
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conduct.” Without Twitter, the suit reads as a claim for money
damages from CAIR.
The Florida Supreme Court has approved of applying
section 768.79 to cases that involve a notional nonmonetary claim,
but that actually involved disputes solely over monetary damages.
Diamond Aircraft, 107 So. 3d at 373. Florida state courts interpret
Diamond Aircraft by looking beyond the procedural posture of a
complaint to assess the “true relief” a party seeks, and apply section
768.79 if it is damages. See, e.g., MYD Marine Distrib., Inc. v. Int’l
Paint Ltd., 187 So. 3d 1285, 1287 (Fla. Dist. Ct. App. 2016).
Viewed through this prism, the lower courts appropriately
applied the statute here. Illoominate made only a glancing gesture
toward injunctive relief directed at another defendant, and then
totally failed to pursue it when that defendant was not served.
Instead, as the magistrate judge correctly pointed out, the language
of their complaint against CAIR sounds entirely in damages. Just
as this Circuit held that Illoominate (in this very same complaint)
could not fraudulently join a party to defeat diversity jurisdiction,
it cannot dodge responsibility for its own choice to continue
litigation by pointing to a single throwaway line in its complaint.
To hold otherwise would defeat the entire purpose of the Florida
statute—any party could upend the law by inserting a single
sentence into its pleadings.
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IV.
If section 768.79 applies, “the sole basis on which a court can
disallow an entitlement to an award of fees is if it determines that
the offer was not made in good faith.” McMahan v. Toto, 311 F.3d
1077, 1083 (11th Cir. 2002) (quotation and brackets omitted); see
also Fla. Stat. § 768.79(7)(a). Unsurprisingly, Illoominate argues
that CAIR’s offer of judgment was not made in good faith. That
contention is wrong, for two reasons.
First, Illoominate waived this argument through inaction.
In this fact-bound inquiry, we review the lower court’s finding of
good faith for clear error. McMahan, 311 F.3d at 1083 (citing
Turner v. Orr, 759 F.2d 817, 821 (11th Cir. 1985)). The district
court, in turn, also reviews the magistrate judge’s order for clear
error or to assess if it is contrary to law. Fed. R. Civ. P. 72(a). But
the magistrate judge was clear: “there is no dispute as to whether
Defendants’ offer was made in good faith.” Illoominate did not
raise the good-faith issue until its objections to the magistrate
judge’s order—which was too late to afford it meaningful relief,
given the district court’s mandate to review record-based factual
arguments for clear error. This is reason enough for us to affirm
the judgment under clear error review, too. 2
2 This reasoning largely tracks our Circuit’s holding in Williams v. McNeil that
the district court does not abuse its discretion by failing to consider arguments
raised for the first time in a party’s objections to a magistrate judge’s report
and recommendations pertaining to dispositive motions. 557 F.3d 1287, 1290–
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If Illoominate’s bad-faith argument is not waived, the only
question of law presented by it is whether a nominal offer of
judgment—here, $1—can be made in good-faith. Yes it can.
“Although nominal offers are suspect where they are not based on
any assessment of liability and damages, they can be valid if the
offerors have a reasonable basis at the time of the offer to conclude
that their exposure was nominal.” McMahan, 311 F.3d at 1083(citation and quotation omitted). Offerors need not have the kind
of evidence necessary to support a judgment when they propose
settlement, only “some reasonable foundation on which to base an
offer.” Id. (quotation omitted).
Here, CAIR had introduced sworn statements showing that
its purported involvement in Illoominate’s claims derived from a
hoax. Those statements should have given Illoominate pause
about pressing its claims. And apparently they did: during the 30-
day window to accept the offer of judgment, Illoominate
voluntarily dismissed three of its claims (and the district judge
dismissed CAIR Florida, Inc. from the case). That left only one of
Illoominate’s five counts operative, and that claim too was
dismissed within three weeks after the settlement window closed.
Given this context, CAIR had a wholly sufficient basis to conclude
a nominal settlement was appropriate. So even if the argument
91 (11th Cir. 2009). That is true even where, unlike here, the district judge
“must determine de novo” any part of the magistrate judge’s disposition that
“has been properly objected to.” Fed. R. Civ. P. 72(b)(3).
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had been properly presented, the district court did not err in
concluding that CAIR’s offer was made in good faith.
V.
Finally, Illoominate argues that the fees CAIR claims are
“fraudulent” and “hyper-inflated.” It asks that we either order the
district court to dismiss CAIR’s motion for fees or conduct an
evidentiary hearing to investigate their claims. We decline to do
so.
The fraud argument was first raised on objection to the
magistrate judge’s order. It went unmentioned by the district
court. There, as here, Illoominate cites no record facts or relevant
legal authority to support its assertions. 3 See United States v.
Corbett, 921 F.3d 1032, 1043 (11th Cir. 2019) (an “appellant must
make explicit the legal basis for the objection and the legal theory
that supports it”) (quotation omitted). Nor has Illoominate filed a
motion for relief from a judgment or order pursuant to Fed. R. Civ.
P. 60(b)(3). Instead, Illoominate’s arguments about “fraud” are just
another way to press the belief that CAIR’s fees are too high.
3 Instead—in both its objections to the district judge and its briefing to this
Court—Illoominate cites a First Circuit case; an unreported 2014 decision
from a federal district court in Texas; and a Florida state court decision. None
of these cases involve disputes over costs or attorney’s fees. In the latter
Florida case, the state court did the opposite of what Illoominate asks us to do:
they reversed a state trial court’s dismissal of a claim for fraud, and then left it
up to the trier of fact (a jury in that instance) to determine if an injury was real
or not. Jacob v. Henderson, 840 So. 2d 1167, 1169–70 (Fla. Dist. Ct. App. 2003).
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As for that unreasonable fees claim, Illoominate’s counsel
declined to follow local rules of the district court instructing that
the recipient of a motion for costs and attorney’s fees, within 14
days, “shall describe with reasonable particularity each time entry
or nontaxable expense to which it objects, both as to issues of
entitlement and as to amount, and shall provide supporting legal
authority.” S.D. Fla. R. 7.3(a). Even after CAIR informed
Illoominate’s counsel about the rule, that counsel chose not to
comply with it. However, Illoominate did brief the
unreasonableness argument (albeit without the requisite
specificity) before the magistrate judge. Though noting that the
failure to follow the rules “may function as a waiver of any
objections,” the magistrate judge nevertheless conducted a
thorough investigation of the costs and fees claimed by CAIR. The
order enacted—and the district court accepted—a reduction of
nearly twenty percent compared to CAIR’s initial motion for costs
and fees.
We review the magnitude of attorney’s fees awarded by a
lower court for abuse of discretion. Farley v. Nationwide Mut. Ins.
Co., 197 F.3d 1322, 1340 (11th Cir. 1999). The abuse of discretion
standard “implies a range of choices,” and “often we will affirm
even though we would have decided the other way if it had been
our choice.” Gray ex rel. Alexander v. Bostic, 613 F.3d 1035, 1039
(11th Cir. 2010).
The magistrate judge’s report cut hours for travel in line
with previous decisions of this Circuit. It cut hourly rates by
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correctly applying Supreme Court precedent on the appropriate
benchmark rate, and showed how the new proposed figure tracked
two similarly situated cases from the Southern District of Florida.
See Blum v. Stenson, 465 U.S. 886, 895 (1984). And the report
denied CAIR all costs not enumerated in 28 U.S.C. § 1920. In short,
Illoominate received a reasonable and fair-minded assessment from
the reviewing magistrate judge.
Based on this analysis, we affirm the holding of the district
court that Illoominate must pay the full amount of costs and fees
ordered by the magistrate judge: $124,423.37.
No evidentiary hearing is required to reach this conclusion.
“When deciding a motion for attorney’s fees, courts rarely reopen
discovery, and evidentiary hearings are often unnecessary.”
Menchise v. Akerman Senterfitt, 532 F.3d 1146, 1153 (11th Cir.
2008). A “determination of a fee award by a district court solely on
the affidavits in the record is perfectly proper.” Id. (quotation
omitted). As the Supreme Court has noted, a “request for
attorney’s fees should not result in a second major litigation.”
Hensley et al. v. Eckerhart et al., 461 U.S. 424, 437 (1983).
On that last point, CAIR should take heed that fees incurred
for litigating the amount of recoverable attorney’s fees are
themselves not recoverable. State Farm Fire & Cas. Co. v. Palma,
629 So. 2d 830, 833 (Fla. 1993); see also McMahan, 311 F.3d at 1085.
After three appeals to our Court, this matter should be at an end.
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* * *
We AFFIRM the district court’s order, which denied
Illoominate’s objections to the magistrate judge’s order granting in
part and denying in part CAIR’s motion for attorney’s fees and
costs.