Akanthos Capital Management, LLC v. Atlanticus Holdings Corporation
2013 U.S. App. LEXIS 21967
| 11th Cir. | 2013Background
- Atlanticus (formerly CompuCredit) sued a group of hedge funds (noteholders) alleging a Sherman Act §1 conspiracy arising from the noteholders’ coordinated refusal to tender and joint repurchase offer; the hedge funds had purchased roughly 70% of the notes on the secondary market.
- The hedge funds originally sued Atlanticus to enjoin a dividend and spin-off as fraudulent transfers; that litigation and Atlanticus’s separate antitrust complaint were assigned to the same district judge.
- The district court dismissed Atlanticus’s standalone antitrust complaint; Atlanticus then pleaded the same antitrust theory as a counterclaim in the hedge funds’ case, which the district court also dismissed.
- On interlocutory appeal the en banc Eleventh Circuit affirmed dismissal of Atlanticus’s antitrust complaint by an equally divided court (no opinion). Atlanticus nevertheless appealed the dismissal of its counterclaim in the parallel case.
- The Eleventh Circuit held the counterclaim barred by res judicata because it was identical to the earlier-dismissed complaint; the court denied the hedge funds’ request for appellate fees under Fed. R. App. P. 38.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Atlanticus’s antitrust counterclaim is precluded by res judicata | Atlanticus: counterclaim is distinct procedural pleading and appeal should proceed | Hedge funds: claim is identical to prior dismissed complaint and barred by res judicata | Court: barred by res judicata; affirm dismissal |
| Whether the hedge funds waived res judicata defense | Atlanticus: the defense was not timely pleaded and thus waived | Hedge funds: raised dismissal argument at earliest opportunity once other case was dismissed | Court: no waiver; defense was timely; would raise sua sponte if necessary |
| Whether the noteholders’ coordinated conduct constitutes a per se Sherman Act violation (concurrence) | Atlanticus: group refusal to tender and joint repurchase offer = group boycott/price-fixing per se illegal | Hedge funds: collective creditor negotiation is procompetitive and not per se illegal | Concurrence: noteholders’ coordinated creditor action is procompetitive, not per se unlawful (district court correctly dismissed on merits) |
| Whether appellate fees under Fed. R. App. P. 38 are warranted | Hedge funds: appeal frivolous; seek fees and costs | Atlanticus: attempted consolidation and stay; failure to dismiss not frivolous conduct | Court: deny fees; failure to dismiss after en banc ruling not enough to impose Rule 38 sanctions |
Key Cases Cited
- CompuCredit Holdings Corp. v. Akanthos Capital Mgmt., LLC, 698 F.3d 1348 (11th Cir. 2012) (en banc, equally divided; affirmed dismissal)
- Timson v. Sampson, 518 F.3d 870 (11th Cir. 2008) (standard of review for dismissal de novo)
- Molinos Valle Del Cibao, C. por A. v. Lama, 633 F.3d 1330 (11th Cir. 2011) (appellate affirmance may rest on any record-supported ground)
- Jaffree v. Wallace, 837 F.2d 1461 (11th Cir. 1988) (finality for res judicata when district court renders judgment)
- United States v. Geders, 585 F.2d 1303 (5th Cir. 1978) (procedural consequence of equally divided en banc court)
- Sharon Steel Corp. v. Chase Manhattan Bank, N.A., 691 F.2d 1039 (2d Cir. 1982) (creditor coordination to protect existing debt is procompetitive)
- United Airlines, Inc. v. U.S. Bank N.A., 406 F.3d 918 (7th Cir. 2005) (collective action by creditors/lessors not antitrust wrongdoing)
- Broad. Music, Inc. v. Columbia Broad. Sys., Inc., 441 U.S. 1 (1979) (per se rule limited to plainly anticompetitive arrangements)