*1 gоvernmen- without decisions his own made the Estate SMITH, Executrix Vera coercion. tal deceased, Smith, J. Robert of the public The effect Plaintiff-Appellant, imply in case in this actions court’s toas had doubt judge sentencing that the INC., PHELPS, a cor AND gone forward DUFF case should whether Hansen, V. poration and Claire there alternatively, whether all, or at Defendants-Appellees. jury to convict. for sufficient to be in the offense role finding Costales’ By No. 91-7521. Govern- with that comparison minor Appeals, Court States United doubt as reasonable suggests ment, the court Circuit. Eleventh over- predisposition appellant’s to whether agents. government activity of rode 22, 1993. Oct. defen- that the truly believes court aWhere a situa- in such participant minor was a dant new trial is
tion, evaluate it should use cannot court a district But in order. jury’s to call the process sentencing post-trial confident We are question. verdict intо Sentenc- intend the Commission under- instrument as an ing Guidelines A de- verdict. in a mining confidence sentencing recommended from parture neither effect is an has such range the Guide- nor consistent reasonable lines.
III. Because conviction. Costales’ affirm We misapplied the the district find that Costales’ granting Sentencing Guidelines however, departure, a downward case remand his sentence vacate resentencing. RE- part; VACATED AFFIRMED part. MANDED
489 TJOFLAT, Before Judge, Chief BIRCH, HATCHETT and Judges. TJOFLAT, Judge: Chief appeals Vera Smith from summary judg- ment in Inc., of Duff Phelps, favor on the issue of whether the statute of limitations run her securities fraud claims. Be- (in prior panel cause a ruled an interlocutory appeal) that this issue inappropriate was summary judgment, we remand for trial. Smith also appeals the district court’s denial of leave complaint to amend her to reflect a federal RICO claim. Because the district court did not abuse its discretion denying amend, leave to we affirm the denial.
I.
setWe
out the facts of this case in our
previous opinion. Smith v.
Phelps,
Duff
(11th Cir.1990) (Smith I).
Robert Smith worked for the financial con- sulting management firm Duff and Inc., Phelps, closely corporation, held from 1956 until his retirement in 1983. Thereaf- ter, he continued to serve aas consultant to April the firm until 1984. Smith had ac- quired Phelps 400 shares of Duff and stock 1970’s, during approximately percent outstanding shares. These shares were subject to repurchase agreements stock Sikes, Jr., Wilson, Griffin Frank M. Mont- Smith, required to sell the shares to the AL, gomery, for plaintiff-appellant. company adjusted at their upon value book his agreement, retirement. Pursuant to this Gill, Franco, Copeland, Richard H. Screws Phelps purchased Duff and Smith’s stock at a Gill, AL, & Montgomery, Edward C. Fitz- price per early share in 1983. At $100 Lord, patrick, Deady, Patrick E. Bissell & time, Phelps secretly negotiat- was Brook, IL, Chicago, for defendants-appellees. ing company. Although the sale of the a deal Security Corporation struck Pacific
in January Employee was an Stock appeal (of 1. Because this is summary judg- disputes an from factual few) which there are more than a defendant, ment in favor of the plaintiff. all resolve favor ultimately On October (ESOT) that Ownership Trust claim RICO plaintiffs dismissed December company’s stock purchased requisite to “state it failed ground their stock sold Employees 1985.2 action.” cause of a civil elements per $2,065.69 share. price of at a trust *3 on whether was silent order court’s The pending sale Smith Phelps notified and case, any In to amend. leave had Smith (but price) agreed the not Security Pacific to the to restore permission not seek did Smith February 1984. by two letters 1, until complaint October to the claim against Duff suit present the filed Smith 1990. 1987, 12, more than August Phelps on and sum- Phelps filed a Duff and repurchased Phelps and Duff after years four con- November mary judgment company had the that He claimed the stock. barred tending that misrepresent- by retirement into him coerced court de- district The remaining claims. the age. mandatory retirement company’s ing the judgment and summary nied thе motion maintained, tactic, Smith of this purpose The immediate the certified shares out- of number to reduce was court This 1988.5 on November appeal per thus, share and, to increase standing ruling affirmed the and granted certification The remaining shareholders. profits of in Smith I. judgment summary denied that theories, in- under several proceeded case decided, I was After Smith fraud, law common securities cluding federal March On to trial. be headed to aрpeared duties, securi- fiduciary state fraud, of breach a mo- Phelps filed however, and Duff Racketeering of fraud, violation and ties sought to in which in limine tion (RICO Act Corrupt Practices and Influenced to made Smith the statements both excluded Act). Journal day he read the others on actions testimony his their and álleged that article Smith complaint, In his argued that this It demeanor. his claims3 statutes unavail- hearsay and thus inadmissible about was an article he read run until begin tо learned prove when Duff and able sale stemming from the lawsuits agreed, court district alleged fraud. Wall Street the March Phelps in would the evidence parties that that, testify advised prepared He was Journal.4 belief on its Based excluded. had not inquiry, he in his diligent although proving that burden “the plaintiff bore read the until he alleged fraud discovered discover, and did not deceased Plaintiffs September death in Smith’s article. Journal dili- reasonable exercise of in the proble would contention of this proof 1987 made discovered, be- gence have Smith, wife Robert’s matic. Vera 12,1985,” the informed August fore estate, sub subsequently was of his executrix could adduce plaintiff unless parties that plaintiff. stituted Judge Easterbrook's employee than an Security Pacific it was not 2. The fact fact that report the critical analysis, necessarily legal it did does not was consummated deal that suits, of which Jordan, one multiple least at were damages. there See had that Smith mean likely go to trial. appeared 440-41. at 815 F.2d 1292(b) (1988). district § a two carries 28 U.S.C. claim 5.See agreed each It is now I, question of 891 F.2d found that See court also year of limitations. to Smith (sin- information duty Phelps' simplicity we refer disclose For at 1570-71. to which law as "controlling question[] of a limitations. gular) ground for difference of substantial [was] there immedi- question for opinion” and certified prophecy, the article self-fulfilling In а sort I, at 1569. 891 F.2d appeal. Smith ate More Pub- Phelps Gets Still & "Duff was titled: duty Phelps a "Duff & panel concluded Court Orders Appeals Getting licity Sued: From any facts material to' Smith $600,000 to disclose Versus Buyout; Claim Trial of Over in the had to disclose Phelps & 'Duff by the $23,000,” opinion issued reported the It agreements” repurchase the stock absence of Although the case. in the Jordan Seventh court. Id. case to the and remanded intrigued more seemed Journal at 1575. alleged affair Phelps Claire Hansen's chairman issue, competent plaintiff evidence on this he would appealed from the “directed a verdict on defendant’s direct behalf at a verdict” on the statute of limitations defense trial of February issue. and from a order denying right her the complaint amend her Throwing wind, caution to restate her RICO claim. We discuss the dispense and the court decided with the II, part limitations issue in then part turn in formality selecting having a III to question. the amendment They trial. reasoned it would be more proffer efficient to let the make a II. his before the and have the grant defendant’s motion for a “direct- In reviewing this case we are reminded April hearing ed verdict.” On *4 “[p]utting that a saddle on a duck does not presented was held at which the plaintiff make it a horse.” Morgan, Smith v. 20,1987. about the events of March 938, S.W.2d 942 (Tex.Civ.App. Antonio — San plaintiffs explained proce- counsel the 1950, dism’d) J., error (Pope, concurring). dure the and court had devised: Here, the “directed verdict” saddle seems [B]y doing this we have eliminated the singularly inappropriate on the back feathers necessity jury of selection aof this morn- of the proceedings below. par Whatever the ing making opening and statements the on ties and the court chose to call they what bifurcated issue of the statute of limita- doing, were posture of the case was when, effect, in tions we would have had no summary judgment. We must unsaddle the opening ... statement to make because of duck and summary judgment review ruling Your Honor’s on the in li- motion granted that the court in favor of the defen mine. dants on the limitations issue. do think But I the record should be Phelps’ 3,1987 November clear, is, probably already and it that this motion for summary judgment contended procedure by agreement parties. of the that the statute of limitations barred Smith’s guess gone And we could through (1) argued suit: The defendants that seleсting sham of jury putting period limitations should be derived from in the certainly them box. But we are not (2) law, federal Smith should have dis
waiving anything by doing [not] that. any alleged 1984, covered February fraud in just propose And now we would prof- and thus that the statute of limitations fer evidence that we would have sub- begun should have to run at that time.7 Sim your ruling mitted but for on the motion in ilarly, Duff and Phelps’ nominal motion for limine, in order to make what we think will alleged directed verdict8 be a record that apрeal. will allow for an prove by Plaintiff cannot prepon- Since proffer, defendant, After the planned, as derance of evidence that Mr. Smith did not to exclude the hearsay not, moved evidence as discover and in the exercise would requested a “directed verdict.” Not sur diligence, reasonable have discovered the prisingly, granted the court Motion years than [more two before May Limine on granted filed], the suit was Defendants are entitled 6, for Motion a Directed Verdict on June against to a directed verdict Plaintiff and 1991.6 in favor of Defendants on their defense of right jury did not 6.Smith waive her to a primarily trial While this claim was based on the agreeing procedure. to this unorthodox As we February notice afforded Smith 1984 let- below, explain posture of the case was sum- ters, the record also showed that the Wall Street mary judgment, not trial. its In June during Journal had run articles 1984 and opinion, agreed proce- the district court that the Phelps. which described the' sale "[Tjhis dure of not constitute a Court is waiver: opinion, agree, and the seem to clarity For convenience we will refer to right Plaintiff waived the to a trial summary judgment. as the last motion only on statute of limitations defense as to the presentation April defense 1991_” added). (emphasis run “when begins to the Plain- to all of discovers, exercise or claims. tiffs discover- diligence should have reasonаble exclusion that the claimed defendants alleged violations.” ed of March events about to meet impossible made Manage Business Durham (quoting Id. al- discovery of the concerning (11th burden her Assoc., Cir. 847 F.2d ment the evidence claimed She fraud.9 leged omitted). agreed panel (citations 1988)) of March the events judg summary that evidence hearsay, and inadmissible appropriate was not ment had her husband to demonstrate served issue: he read fraud until aware been fact remains material genuine issue [A] article. Journal Street Wall February 1984 let- whether the regarding first court denied The district Journal Wall Street various and the ters April summary judgment per- put a reasonable articles concluding that and whether of fraud on notice son becomes, then, this Court question for determining diligence due exercised letters of those receipt whether Such defrauded. he been *5 planned announcing, the February, jury. by the resоlved are best questions a reasonable led have acquisition reason, hold that this For discovery of law a matter person Phelps’ mo- correctly & denied of the is The Court alleged fraud. of the statute judgment on summary tion preclud- judgment is summary opinion that ground. of limitations of questions notice case since ed there that appeared at 1572. It F.2d 891 of the statute regarding diligence due the limita- summary judgment on be could for de- questions generally are limitаtions brought was evidence new unless tions issue stated, Simply jury.... by a termination forward. hold, as it cannot that concludes the Court letters should law, the said that a matter of brought facts were Although no new Mr. leading to inquiry provoked have of consideration between the court before ne- discovery the nondisclosed of Smith’s and the summary judgment first Defendant gotiations between most did eliminate last, the district in the fall Security Pacific Phelps and concerning the events рlaintiffs evidence claimed 20,1987, the date Smith of March panel I affirmed. However, The Smith since the fraud. discovered have to the issue relevant appli- question of never evidence was I resolved Smith have holding that should Smith date be decided—the cable not did controlling. elimination fraud —its two-year was discovered Alabama’s essential that: the record. panel materially concluded affect at 1571. F.2d 891 “not was settled be question limitations length of [wjhile governs law Alabama known, actually was the information when law deter- federal period, the limitations of due dili exercise in the rather when but period point the mines at what Hunt v. known.” have been law, gence it should federal run. Under begins to plead. was plaintiff once litigants in these to find is not uncommon It brought was the action plaintiff argue since They dispute about when cases in sorts of alleged is of the What more the time years after the fraud. discovered than two have should more however, odd, case in find a is to fraud, of demon- little the burden than a bears produced has been so little We do which tolled. should strating argue party each attractive for becomes The statute tolling relevant. agree is not opponent. on its lies the burden J. begin Robert to run until not have dispute that the defendants beyond It is or, discovered, reason- the exercise Smith establishing the' elements proof the burden discoverеd, al- diligence, should able of limita- of the statute defense of the affirmative the burdens bear leged The defendants fraud. argue Nevertheless, here defendants tions. the production question. persuasion on that production shifted the burden
493 Co., Bank & Trust party; American 783 F.2d and leave freely given shall be when Cir.1986).10 (11th justice 1014 Whether or not Mr. requires.” so We review denial of actually learned of the Smith leave to discretion, amend abuse of 20, 1987, the require on March issue remаined: when the district court justify the denial. should he learned of it? a “While decision grant whether to leave to excluded the court was inadmissible not clearly amend is within the discretion of the hearsay, because it was but because it was justifying reason must be probative discovery question.11 apparent for denial of a motion to amend.” Baker, (11th Moore v. 989 F.2d question summary judg Cir.1993); see also Douglas Nolin v. County, ment on the statute of limitations defense is (11th Cir.1990). 903 F.2d appropriate already has been resolved. It is case, the law the we will reconsid Normally, grant “[a] of leave to amend er the issue in the absence of new evidenced particularly appropriate following dismissal We therefore reverse the district court’s of complaint for failure to state a claim.” grant of “directed verdict” favor Co., Inc., Thomas v. Mfg. Farmville 705 F.2d defendants. (11th Cir.1983) (citation omitted). Nevertheless, we cannot conclude that
III. district сourt abused its discretion in denying leave to amend. Smith had from October Several months after was (when original RICO claim was decided, 1,1990, on October Smith moved for dismissed) (when until November leave to complaint. amend her After leave proceedings in the district stayed court were granted, she filed her Ninth Claim for I), pending then May from Relief, realleged and restated the dis *6 (when issued) the Smith mandate to on missed claim. RICO On December seek leave to amend. In a similar situаtion reconsideration, the the struck we noted: claim because amended “under the circum stances, Plaintiffs untimely amendment is Although generally, the mere passage of prejudice and will the Defendants.” On Feb time, more, without is an insufficient rea- 7,1991, ruary reconsideration, on further the son to deny leave to a complaint, amend court analysis elaborated on its earlier in may delay clearly undue support such de- refusing to allow the to amend. case, nial. long history Given the of this appeals ruling. Smith now opportunities and the plaintiff] [the to 15(a) provides Fed.R.Civ.P. that after attempt to cure the deficiencies in the com- responsive pleading party is may plaint, filed “a proposed [his] amendment was complaint] only [its amend by clearly untimely; ... leave of the district court did not court or written of consent the adverse by refusing abuse its discretion to it. allow dissenting opinion, Judge In his ar- 10. Hatchett excluded evidence since the last time this court gues that we should not remand case for this summary judgment addressed on the statute of trial “because the outcome is certain: a directed issue, probative only limitations that evidence is verdict the statute because of bars the improperly as to an construed statute of limita- Judge lawsuit.” at 495. conclu- Hatchett's Infra question; tions it therefore is irrelevant the incorrect, however, sion is because it is nоt Mr. parties outcome of the case. The now stand prove Smith’s burden to that he first learned of evidentiary procedural the posture same 20, Rather, alleged the fraud on March it case, they did when decided Smith I. In that 9, burden, supra is defendants’ see note to dem- summary judgment improper ruled onstrate that Mr. Smith should have learned of court; on the record before the as the record on years the fraud more than two before he unchanged the statute of limitations issue is since (and filed suit this thus that the of limita- statute then, summary judgment improper. remains suit). appears tions the As it bars that the standards, and the court misconstrued these the express opinion 11. We on whether all parties hardly positions they are "in the same testimony were Mr. Smith’s in when the words case ended in district deeds 20, court.” hearsay. Though at 495. March 1987 is inadmissible Infra Moreover, certainly interesting only proper; remand standpoint, from a technical it is mandatory. though to, Even court present has it is our decision. irrelevant 494 suit, the not bar of limitations ute Operating Union v. International
Hester liability and dam- try the then (11th parties would 1574, Cir. 1578-79 F.2d 941 Engineers, sense because good This made issues. ages omit original; citations 1991) (emphasis end could defense of limitations the statute 178, Davis, 371 U.S. ted); Foman see also of limitations As to the case. (1962); 222 230, L.Ed.2d 9 S.Ct. Rob- position that trial, appellant’s it was the Airlines, Inc., F.2d v. Eastern Floyd lawyer, to his made statements ert Smith Cir.1989), other rev’d on (11th 1462, 1490 secretary, Sr., Sikes, lawyer’s Griffin 1489, 113 530, 111 S.Ct. 499 U.S. grounds, Wiggins, on March Davis Gloria Air Eastern (1991); Shipner v. L.Ed.2d first Smith Robert when indicated Cir.1989). (11th Inc., Lines, F.2d defrauded. he had been knew order, dis- court February its In had indicat- though the district Even the defen- effect on prejudicial cussed the. testi- exclude would probably ed allowed: were amendment if the dants Sr., Davis Sikes, and Gloria mony of Griffin impression left with were Defendants agreed to waive Wiggins, the RICO abandoned the Plaintiff try statutes trial has, large Discovery this case claim. trial. At a bench court in addition completed, [the part, been Wiggins’ trial, court excluded the district Defendants require would claim] a RICO lost appellants testimony, and and Sikes’ preparation of their change the nature Consequent- case. at of action new allow a cause entirely. To tried; to be issues needed ly, no other prejudicial. would late date lawsuit. barred conclude cannot We appellant’s problеm from Here is the refusing to allow its discretion abused alive, he were If Smith the case. side claim dismissed revive Smith first discovered testify that he would nearly three languish for allowing it after then on March years. told testify that he Wiggins call Sikes learning just on March them IV. testimony, Smith would fraud. With inconvenience, Vera Notwithstanding the learned first to when he issue as a fact create ques- factual to have is entitled *7 course, side other Of the fraud. issue deter- underlying the limitations tions provе that to attempting introduce Consequently, jury. by an actual mined learned of or should Smith knew verdict” “directed court’s the district reverse 20,1987. now As it than March earlier for trial. and remand issue on Wiggins’ stands, dead and with Smith its within discre- court acted The district excluded, has appellant testimony Sikes’ restated Smith’s to it refused allow tion when or discovered of when Therefore, the Feb- affirm claim. ap- The the fraud. discovered should have denying leave amend ruary 1991 order on fаct issue a create pellant cannot complaint. pre- mention limitations —not be remanded case should vailing. The ORDERED. IS SO IT a is certain: outcome trial because for of limita- dissenting: because verdict Judge, HATCHETT, directed must appellant The lawsuit. bars the tions any- find I do respectfully dissent. I go order excluded evidence way the unusual thing improper or this case. anything in forward case. As in this proceeded district court so the witnesses appellant called this court once proceedings, understand with which proffer would have this I to remanded Smith testimony of Sikes determine trial. for the case set district rule, or fell hearsay violated Wiggins con- parties decided court and district Dead- of the Alabama prohibitions fashion, within trying the in bifurcated the trial duct brought parties have man’s Statute. If the stat- first. nothing appeal except in this case ruling admissibility
district court’s evidence and the refusal to allow an amend- pleading. ment to a majority should decide this case based on the issues the framed parties and briefed: regarding issues admission evidence. The trial, parties trial, waived went to appellant suffered a directed verdict be- get cause she was unable into evidence testimony. crucial If the district court erred evidence, ruling regarding its appel- Instead, lant is entitled to a new trial. majority appellant affords the a new trial ruling without ever on the evidence issues. remand, On will the same positions they were in when the case ended
in the district Neither the court.
court nor through are aided appeal. Savannah, Toporek, GA,
Julian H. for Dan- iels. Bell, III, Savannah, GA, William G. for America,
UNITED STATES of George. Plaintiff-Appellee, III, Savannah, GA, Linnie L. Darden Scott. DANIELS, Tyrone Scott, Shawn Paul Martin, Savannah, GA, Clarence L. George, Green, Johnny Sadie Elizabeth Green. Anderson, Hicks, Morris Kenneth Bruce Defendants-Appellants. Willis, Jacksonville, FL, Robert S. *8 Anderson.
No. 91-8571. Joseph Newman, D. Atty., Asst. U.S. Sa- United Appeals, Court of States vannah, GA, for U.S. Eleventh Circuit. Jackson, Savannah, Terry GA, G. Oct. Hicks. ON PETITION FOR REHEARING TJOFLAT, Judge, Before FAY Chief COX, Judges.