author: OAKES, Senior Circuit Judge:

text:
    AQUATHERM INDUSTRIES, INC., a foreign corporation, Plaintiff-Appellant, v. FLORIDA POWER & LIGHT COMPANY, Defendant-Appellee.
    No. 95-2077.
    United States Court of Appeals, Eleventh Circuit.
    June 11, 1996.

      Blaine H. Winship, Miami, FL, for Appellant.
    Elizabeth J. du Fresne, Miami, FL, for Appellee.
    Before HATCHETT and BARKETT, Circuit Judges, and OAKES , Senior Circuit Judge.

       Honorable James L. Oakes, Senior U.S. Circuit Judge for the Second Circuit, sitting by designation.

   OAKES, Senior Circuit Judge:

Appellant Aquatherm Industries, Inc. (“Aquatherm”) appeals from a judgment entered on December 9, 1994, by the United States District Court for the Middle District of Florida, Anne C. Conway, Judge, dismissing Aquatherm’s federal antitrust and Lan-ham Act claims against appellee Florida Power & Light Company (“FPL”). On appeal, Aquatherm argues that the district court erred in concluding that res judicata barred Aquatherm’s claims under Florida preclusion law. While we agree with the district court that Aquatherm’s Lanham Act claims were barred, we find that res judicata did not preclude Aquatherm’s pursuit of its federal antitrust claims. We therefore affirm in part, reverse in part, and remand.

BACKGROUND

Aquatherm is a manufacturer of solar-powered heating systems for swimming pools. FPL is a regulated utility that sells electricity in an area of Florida containing more than 250,000 in-ground swimming pools. The underlying dispute in this case involves FPL’s statements to its customers regarding electric pool heat pumps and solar pool heaters, and Aquatherm’s contention that these statements have unfairly advantaged the market for pool heaters reliant on electricity.

Aquatherm and FPL have expended a great deal of energy on their journey to this court. Aquatherm commenced its suit in 1991 by filing state antitrust claims in Florida state court; it later amended its complaint to include a federal claim for unfair competition under the Lanham Act, 15 U.S.C. 1125(a) (1994). FPL then removed the action to the United States District Court for the Southern District of Florida, at which point Aquatherm voluntarily withdrew its Lanham Act claim. The District Court consequently remanded the action to state court.

After remand, Aquatherm again amended its complaint to include state law claims of trade libel and product disparagement. FPL moved for dismissal and the state court dismissed all of Aquatherm’s claims with prejudice in November 1992. The state court’s decision was affirmed by a Florida appellate court in March 1994.

Prior to dismissal of the state action, Aquatherm filed a federal action in the United States District Court for the Middle District of Florida in November 1992. The complaint alleged federal antitrust violations under the Sherman Act, 15 U.S.C. §§ 1 and 2 (1994), and reasserted Aquatherm’s Lan-ham Act claim. After Aquatherm amended this complaint to add antitrust claims under the Clayton Act, 15 U.S.C. § 15 (1994), FPL moved for dismissal. The district court stayed the action pending resolution of the state court appeal.

When the Florida appellate court affirmed the dismissal of Aquatherm’s claims, FPL renewed its motion to dismiss in the federal district court on the basis of res judicata and failure to state any colorable claim. In December 1994, the district court granted FPL’s motion to dismiss on the ground that res judicata barred Aquatherm’s antitrust and Lanham Act claims.

In this appeal, Aquatherm contends that the district court erred in its construction and application of res judicata principles in several ways: (1) by misapplying United States Supreme Court precedent to reach the conclusion that prior resolution of Aquat-herm’s state antitrust claims barred its later federal antitrust claims; (2) by misinterpreting Florida preclusion law to find that res judicata bars a subsequent antitrust claim when an earlier court lacked subject matter jurisdiction over the original antitrust claim; (3) by applying only two of the four elements required for res judicata under Florida law to hold that Aquatherm’s Lanham Act claim was barred; and (4) by ignoring the “manifest injustice” exception to res judicata. We agree with Aquatherm that the district court erred in its analysis of Aquatherm’s antitrust claims under res judicata principles. We therefore reverse the dismissal of the antitrust claims and remand for further proceedings. Because we find that the district court properly dismissed Aquatherm’s Lanham Act claim, we affirm that portion of the district court’s decision.

DISCUSSION

The application of res judicata principles to Aquatherm’s claims constitutes a pure question of law that we review de novo. Meshulam v. General Motors Corp., 995 F.2d 192, 194 (11th Cir.1998); Israel Discount Bank Ltd. v. Entin, 951 F.2d 311, 314 (11th Cir.1992). We therefore must assess whether Aquatherm can prove any set of facts entitling it to relief on its antitrust and Lanham Act claims. St. Joseph’s Hosp., Inc. v. Hospital Corp. of America, 795 F.2d 948, 953 (11th Cir.1986). Because Aquatherm’s two sets of claims raise discrete issues under the doctrine of res judicata, we address them separately.

1. Antitrust Claims

This case presents the question whether a federal district court may give a Florida court judgment preclusive effect in a federal action brought under antitrust laws that are within the exclusive jurisdiction of the federal courts and therefore could not have been raised in the state court proceeding due to lack of subject matter jurisdiction. While this issue appears to be one of first impression in this circuit, we are not without guidance: the Supreme Court has laid out the approach for determining whether a prior state court judgment may bar a later federal antitrust suit in Marrese v. American Academy of Orthopaedic Surgeons, 470 U.S. 373, 105 S.Ct. 1327, 84 L.Ed.2d 274 (1985); see also Matsushita Electric Industrial Co., Ltd. v. Epstein, — U.S. -, -, 116 S.Ct. 873, 878, 134 L.Ed.2d 6 (1996) (“Marrese provides the analytical framework for deciding whether the [state] court’s judgment precludes this exclusively federal action.”).

In Marrese, the Court reversed a lower court ruling that held that, as a matter of federal law, res judicata barred federal antitrust claims in a federal suit brought after an Illinois state court judgment. Balancing the exclusivity of federal court jurisdiction over federal antitrust claims with the full faith and credit given state court proceedings pursuant to 28 U.S.C. § 1738, the Court outlined a two-step analysis for federal courts to apply in cases such as the one before us.

Marrese directs a court “to look first to state preclusion law in determining the preclusive effects of a state court judgment.” 470 U.S. at 381, 105 S.Ct. at 1332. If state preclusion law indicates that res judicata should bar a claim in a subsequent federal suit, a court must then evaluate whether to permit the claim nevertheless as an exception to the full faith and credit requirements of § 1738. Id. at 383, 105 S.Ct. at 1333. The Court noted that:

With respect to matters that were not decided in the state proceedings, ... claim preclusion generally does not apply where “[t]he plaintiff was unable to rely on a certain theory of the case or seek a certain remedy because of the limitations of the subject matter jurisdiction of the courts.... ” Restatement (Second) of Judgments § 26(l)(e) (1982). If state preclusion law includes this requirement of prior jurisdictional competency, which is generally true, a state judgment will not have claim preclusive effect on a cause of action within the exclusive jurisdiction of the federal courts.

Id. at 382, 105 S.Ct. at 1333.

Under Marrese, therefore, we must determine whether Florida law would give preclu-sive effect to a judgment by a Florida court that lacked subject matter jurisdiction over the original claims. Id. at 386, 105 S.Ct. at 1334-35. If, as Marrese recognizes is usually the case, Florida preclusion law requires that the state court have subject matter jurisdiction for res judicata to apply, then Aquatherm’s federal antitrust claims cannot be barred.

It is well-established that the general rule against splitting causes of action does not apply when suit is brought in a court that does not have jurisdiction over all of a plaintiffs claims. See Restatement.of Judgments (Second) § 25 cmt. e (1982) (“If ... the court in the first action would clearly not have had jurisdiction to entertain the omitted theory or ground ... then a second action in a competent court presenting the omitted theory or ground should be held not precluded.”); 18 Charles A. Wright, Arthur R. Miller, Edward H. Cooper, Federal Practice and Procedure: Jurisdiction § 4470 (1981) (“On balance, it seems better to reject claim preclusion” when jurisdiction is exclusively federal); see also Hayes v. Solomon, 597 F.2d 958, 984 (5th Cir.1979) (holding that “[t]he principle of res judicata which prohibits splitting a cause of action ‘applies only to claims capable of recovery in the first action.’ ” (citations omitted)), cert. denied, 444 U.S. 1078, 100 S.Ct. 1028, 62 L.Ed.2d 761 (1980).

From a review of Florida law, it appears that Florida does follow this general rule requiring subject matter jurisdiction over claims in the original action in order for res judicata to act as a bar to those claims in a later action. As stated in Florida Jurisprudence 2d:

The doctrine of res judicata applies to the judgments or decrees of courts of competent jurisdiction....

32 Fla.Jur.2d Judgments and Decrees § 130 (1994) (emphasis added).

In order for a judgment or decree to operate as a bar, it must be rendered by a court having jurisdiction over the parties and subject matter.

33 id. at § 177.

Case law also supports the conclusion that Florida does not permit preclusion unless the prior court had jurisdiction over the claim. See, e.g., Albrecht v. State, 444 So.2d 8, 11 (Fla.1984) (“The general principle behind the doctrine of res judicata is that a final judgment by a court of competent jurisdiction is absolute...United Bhd. of Carpenters and Joiners v. Graves Inv. Co., 15 So.2d 196, 197 (Fla.1943) (“If the court failed to acquire jurisdiction of the subject matter ... [there is] no right to rely on the validity of - the decree.... ”).

It is not surprising that neither party can offer, nor can we find, any direct statement made by the Florida courts on the particular problem presented here. As noted in Marrese, “a state court will not have occasion to address the specific question whether a state judgment has ... claim pre-clusive effect in a later action that can be brought only in federal court,” 470 U.S. at 381-82, 105 S.Ct. at 1332, because the state court will never obtain jurisdiction over such an action. Given the assumption of competent jurisdiction reflected in Florida’s approach to res judicata, as well as the absence of any indication that Florida does not follow the usual rule, we find that Florida’s preclusion laws do not permit a prior state court judgment to act as a bar to claims over which the state court did not have subject matter jurisdiction. Therefore, Aquatherm’s antitrust claims cannot be barred by res judicata in its federal action.

The district court did. not engage in the above analysis, concluding instead that Aquatherm’s state antitrust claims, which of course were litigated in a court of competent jurisdiction below, barred any federal claim against the same defendant arising from the same facts. The district court also found that Aquatherm, once removed to federal court, was required to raise its federal antitrust claims in that forum. We believe both these holdings were in error.

First, Marrese directly rejected the proposition that asserting state antitrust claims can eliminate the right to bring federal antitrust claims in a subsequent federal action. The Seventh Circuit plurality opinion in Marrese had held:

[A] state court judgment bars the subsequent filing of a federal antitrust claim if the plaintiff could have brought a state antitrust claim under a state statute “materially identical” to the Sherman Act.

Marrese, 470 U.S. at 377, 105 S.Ct. at 1330. In reversing the Seventh Circuit, the Supreme Court stated clearly that:

We ... reject a judicially created exception to § 1738 that effectively holds as a matter of federal law that a plaintiff can bring state law claims initially in state court only at the cost of forgoing subsequent federal antitrust claims.

Id. at 386, 105 S.Ct. at 1335; see also Eichman v. Fotomat Corp., 759 F.2d 1434, 1437 (9th Cir.1985), amended on other grounds, 880 F.2d 149 (9th Cir.1989). Marrese therefore repudiates the district court’s conclusion that Aquatherm’s state antitrust claims served as its sole opportunity to present an antitrust complaint.

Second, there is no authority for the district court’s proposition that Aquatherm was required to assert its federal claims when it found itself in federal court by virtue of removal. The district court rested its holding on our decision in Olmstead v. Amoco Oil Co., 725 F.2d 627 (11th Cir.1984), where we found that a state court plaintiff who failed to transfer his suit to another court of the same state in order to escape monetary limits on jurisdiction was barred from bringing a second state claim. The district court read Olmstead to mean that whenever there is an opportunity to avoid jurisdictional constraints, a plaintiff must avail itself of them. While this reading may be accurate when different divisions of a state’s courts are involved, as in Olmstead, it does not apply when claims are raised first in state and then in federal court. As stated in Marrese:

The rule that the judgment of a court of limited jurisdiction concludes the entire claim assumes that the plaintiff might have commenced his action in a court in the same system of courts that was competent to give full relief. See Restatement (Second) of Judgments § 24, cmt. g (1982).

470 U.S. at 383 n. 3, 105 S.Ct. at 1333 n. 3. Here, Aquatherm could not have received full relief on its claims in state court, and it chose not to commence its action in federal court. The district court’s broad reading of Olm-stead, is therefore in error.

Marrese recognizes that our “parallel systems of state and federal courts” raise concerns of comity in the application of res judicata. Id. at 385, 105 S.Ct. at 1334. In analyzing Aquatherm’s antitrust claims without regard for the effect of subject matter jurisdiction, the district court overlooked these concerns. Because the district court failed to apply the preclusion analysis set forth in Marrese and instead based its dismissal of Aquatherm’s antitrust claims on erroneous conclusions of law, we reverse its decision as to the antitrust claims.

II. Lanham Act Claims

Aquatherm’s Lanham Act claim differs from its antitrust claims in a crucial respect: Federal courts do not have exclusive jurisdiction over an action brought under the Lanham Act. 28 U.S.C. § 1338(a) (1994); 15 U.S.C. § 1121 (1994). Therefore, Aquatherm could have litigated its Lanham Act claim while in state court, but chose not to do so. The concurrent jurisdiction shared by the state and federal courts over the Lanham Act requires us to analyze res judicata under the standard set forth in Migra v. Warren City School Dist. Bd. of Educ., 465 U.S. 75, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984).

In Migra, the Supreme Court held that when a federal cause of action can be initially litigated in either state or federal court, a federal court must look to the preclusion law of the state in which it sits to determine the res judicata effect of a prior judgment from a state court of competent jurisdiction. Id. at 85, 104 S.Ct. at 898. The Court rejected the argument that a plaintiff should not be precluded from suit in federal court when its federal claim could have been litigated in a prior state court proceeding, stating that a plaintiff is not:

guaranteed] ... a right to proceed to judgment in state court on [its] state claims and then turn to federal court for adjudication of [its] federal claims.

Id. Instead, federal courts must give state court judgments full faith and credit under 28 U.S.C. § 1738 and apply the state’s preclusion law. Id. at 84, 104 S.Ct. at 897-98; Stockton v. Lansiquot, 838 F.2d 1545 (11th Cir.) (per curiam), cert. denied, 488 U.S. 891, 109 S.Ct. 225, 102 L.Ed.2d 216 (1988).

Under Florida law, res judicata bars a second suit when a court of competent jurisdiction has entered final judgment in an earlier suit and the following four conditions are met:

identity of the thing sued for; identity of the cause of action; identity of the parties; [and] identity of the quality in the person for or against whom the claim is made.

Albrecht v. State, 444 So.2d 8, 12 (Fla.1984). Here, the Florida court had jurisdiction over Aquatherm’s Lanham Act claim and its dismissal with prejudice of Aquatherm’s state court action served as a final judgment. See Crews v. Dobson, 177 So.2d 202, 205 (Fla.1965). There is also no doubt that the same parties were acting in the same capacity in both actions, thus satisfying Albrecht’s third and fourth conditions.

Aquatherm argues, however, that its Lan-ham Act claim in federal court involved both a different cause of action and a different form of requested relief than the claims for trade libel and product disparagement it made in state court, and that therefore res judicata should not bar the litigation of the Lanham Act claim in federal court. We agree with neither of these contentions.

Albrecht provides that “[t]he determining factor in deciding whether the cause of action is the same is whether the facts or evidence necessary to maintain the suit are the same in both actions.” 444 So.2d at 12. Here, Aquatherm’s state claims for trade libel and product disparagement relied on the same essential facts, namely, the alleged statements made by FPL to its customers, as its later Lanham Act claim. Indeed, the state claims appear to be simply a refashioning of the Lanham Act claim that Aquatherm voluntarily dropped from its original complaint so that it could return to state court after being removed to federal court by FPL. To treat such claims as non-identical would ignore the teaching of the Restatement (Sec ond) of Judgments § 25, cmt. e., ill. 11, which offers almost the exact situation presented here as an example of how res judicata bars a federal claim that could have been raised in an earlier state court suit. We see no reason to disregard such wisdom.

Aquatherm also can find no purchase with its argument that the compensatory damages it sought in state court were a different form of relief from the treble damages and profits it requested in federal court. Aquatherm relies exclusively on Sivilla v. State Farm Mut. Auto. Ins. Go., 614 So.2d 553 (Fla.3d Dist.Ct.App.1993) (per curiam) for this contention, ignoring that Sivilla involved two separate claims for breach of contract and bad faith that Florida law required be split for trial. Here, Aquatherm voluntarily chose not to urge a federal ground for recovery for the same conduct that served as the foundation of its state law claims. When the plaintiff itself splits the cause of action to suit its own purposes, we find that damages are damages, regardless of amount, for the purposes of res judicata. See Amey, Inc. v. Gulf Abstract & Title, Inc., 758 F.2d 1486, 1509 (11th Cir.1985) (finding that identity of thing sued for existed when plaintiff sued for $2,500 in damages in first suit and $35,000 in second suit), cert. denied, 475 U.S. 1107, 106 S.Ct. 1513, 89 L.Ed.2d 912 (1986).

Florida law is clear that “[t]he rule against splitting causes of action makes it incumbent upon plaintiffs to raise all available claims involving the same circumstances in one action.” Department of Agric. and Consumer Serv. v. Mid-Florida Growers, Inc., 570 So.2d 892, 901 (Fla.1990). Aquatherm did not abide by this rule, but elected instead to bring only its state law claims in the initial state court litigation. We therefore agree with the district court that Aquatherm’s Lanham Act claim is barred by res judicata.

CONCLUSION

For the foregoing reasons, we REVERSE the dismissal of Aquatherm’s antitrust claims and REMAND to the district court for farther proceedings. We AFFIRM the dismissal of the Lanham Act claim.

      . As noted by the Supreme Court, the terminology used to discuss the preclusive effects of earlier litigation is somewhat confusing because res judicata is often used to refer both to claim preclusion and to issue preclusion. Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 77 n. 1, 104 S.Ct. 892, 894 n. 1, 79 L.Ed.2d 56 (1984). Here, we adopt for the purposes of continuity the district court’s use of the term “res judicata” as a synonym for "claim preclusion,” which refers to "the effect of a judgment in foreclosing litigation of a matter that has never been litigated, because of a determination that it should have been advanced in an earlier suit.” Id. We are not confronted with any question of issue preclusion, also known as collateral estoppel, in this case.

      . Exclusive federal jurisdiction is provided by statute for Sherman Act claims, 15 U.S.C. § 4 (1994), and Clayton Act claims, 15 U.S.C. § 15 (1994). See Freeman v. Bee Machine Co., Inc., 319 U.S. 448, 451, 63 S.Ct. 1146, 1147-48, 87 L.Ed. 1509 (1943), Hayes v. Solomon, 597 F.2d 958, 984 (5th Cir.1979), cert. denied, 444 U.S. 1078, 100 S.Ct. 1028, 62 L.Ed.2d 761 (1980).

      . Illustration 11 reads:
      A sues B on a common law basis in a state court for unfair competition. After trial judgment is entered for the defendant. A then attempts to bring an action against B in federal court upon the same behavior, now claiming infringement of A’s federally protected trademark. The action is barred. The claimed violation of federal right could have been urged as a ground of liability in the state court action, as state courts have concurrent jurisdiction with the federal courts to enforce that right.

      . Aquatherm also contends that to allow res judi-cata to bar its Lanham Act claim would work a “manifest injustice.” After reviewing the argument for this contention, we deem it wholly without merit.


source: Caselaw Access Project

author: RICHARD MILLS, District Judge:

license: Public Domain

text:
    Paul D. BURSIK, Receiver, Federal Deposit Insurance Corporation, as Statutory Successor to Resolution Trust Corporation, as Receiver for Florida Federal Savings Bank, F.S.B., and as Conservator for Florida Federal Savings Bank, F.S.B., Plaintiff-Counterclaim-Defendant-Appellee, Peoples Southwest Real Estate Limited Partnership, a Delaware Limited Partnership, Plaintiff-Counterclaim-Defendant, v. ONE FOURTH STREET NORTH, LTD.; One Fourth Street North Management, Inc., as the Sole General Partner of One Fourth Street North, Ltd., Defendants-Counterclaim-Plaintiffs-Appellants, Fox and Grove, Chartered, Incorporated; David J. Abbey, d/b/a Fox and Grove, Chartered, Incorporated; Justice Corporation, Defendants.
    No. 95-2626.
    United States Court of Appeals, Eleventh Circuit.
    June 11, 1996.
    Benjamin J. Ockner, Michael H. Diamant, M. Collette Gibbons, Kahn, Kleinman, Ya-nowitz & Amson, Cleveland, OH, for One Fourth Street North, Ltd.
    Anne Spencer Mason, Mason & Associates, P.A., Clearwater, FL, Leslie Randolph, Resolution Trust Corp., Washington, DC, for Resolution Trust Corp. and Florida Federal Sav. Bank, F.S.B.
    Before HATCHETT, Circuit Judge, HENDERSON, Senior Circuit Judge, and MILLS , District Judge.

       Honorable Richard Mills, U.S. District Judge for the Central District of Illinois, sitting by designation.

   ORDER

RICHARD MILLS, District Judge:

The order of the District Court granting summary judgment in favor of Appellee Resolution Trust Corporation, as receiver and conservator, is adopted by this Court.

For the reasons set forth in the District Court’s order, the summary judgment is AFFIRMED.

APPENDIX

United States District Court Middle District of Florida Tampa Division

Resolution Trust Corporation, as Receiver for Florida Federal Savings Bank, F.S.B., and as Conservator for Florida Federal Savings Bank, F.S.B., Plaintiff, v. One Fourth Street North, Ltd., et al., Defendants.

Case No. 91-201-Civ-T-23C

ORDER

Before the Court is the RTC’s (1) motion for summary judgment (doc. 57) and (2) supplemental motion for summary judgment or to dismiss for lack of subject matter jurisdiction (doc. 91).

This claim arose out of the alleged breach of an agreement to settle a foreclosure action brought by Florida Federal against the defendants. The defendants counterclaimed that Florida Federal failed to cany out the settlement agreement. Subsequently, Florida Federal went into receivership, and the RTC, as the receiver, assumed the suit. Later, the RTC assigned its interest in the rights to the property in question to Peoples Southwest Real Estate Limited Partnership, which continued to pursue the suit.

On February 1, 1994, the parties’ stipulated partial agreement and joint motion to dismiss was granted, and the plaintiffs claims were dismissed (doc. 163). To the extent the RTC’s motions (doc. 57 and 91) relate to the initial complaint, they are DENIED AS MOOT. Furthermore, the RTC’s original motion for summary judgment (doc. 57) is redundant and, therefore, is also DENIED AS MOOT.

While the original claims are settled, the defendants’ counterclaim against the RTC remains. The counterclaim consists of nine counts, of which the defendants explicitly ceased to pursue four: IV, VII, VIII, IX (doc. 62, p.- 6). Furthermore, the defendants’ Supplement to Pretrial Stipulation (doe. 79) explicitly states that the defendants claim no damages. Consequently, Count I, a claim exclusively for damages, has been voluntarily dismissed. The remaining four counts request equitable relief against the RTC: Count II requests enforcement of the agreement, Counts III and VI request specific performance of the agreement, and Count V requests an injunction against the RTC.

The RTC contends that the equitable counts remaining in the defendants’ counterclaim are barred by 12 U.S.C. § 1821(j), the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”), Pub.L. No. 101-73, 103 Stat. 183. That section states that “[e]xcept as provided in this section, no court may take any action, except at the request of the Board of Directors by regulation or order, to restrain or affect the exercise of power or functions of the [RTC] as a conservator or a receiver.” 12 U.S.C. § 1821(j). This provision has been interpreted to restrict injunctions, and other equitable relief, against the RTC when the RTC acts as a receiver or conservator, even if the RTC violates its own procedures or behaves unlawfully.

As stated expressly in the statute, Section § 1821(j) applies only if the RTC is acting in its capacity as receiver. In this case, the RTC was appointed receiver for Florida Federal. During the events resulting in this action, the RTC was attempting to protect or dispose of the assets of Florida Federal and, therefore, was acting in its capacity as receiver for the institution. See 12 U.S.C. § 1821(d)(2)(B) and (E). Accordingly, because § 1821(j) precludes the defendants from raising their equitable counts against the RTC, the motions (does. 57 and 91) are GRANTED as to Counts II, III, V, and VI, which are DISMISSED WITH PREJUDICE.

The Court does not have the authority to enjoin the RTC in relation to the transaction alleged in Count V of the counterclaim, to enforce the settlement agreement as requested in Count II or to order specific performance as requested in Counts III and VI.

ORDERED at Tampa, Florida on this 11th day of April, 1995.

/s/ Steven D. Merryday

STEVEN D. MERRYDAY

United States District Judge

      . Many claims which arise against the RTC under somewhat similar circumstances must pass muster under the common law D’Oench doctrine, which is effectively codified at 12 U.S.C. § 1823(a). Twin Const., Inc. v. Boca Raton, Inc., 925 F.2d 378, 382-4 (11th Cir.1991); see Motorcity of Jacksonville, Ltd. v. Southeast Bank, 39 F.3d 292, 298 (11th Cir.1994). However, the Eleventh Circuit has held that ‘‘D’Oench does not aid the federal banking authority where bilateral obligations appear in the bank’s records.” Twin Const., Inc., 925 F.2d at 383. In this case, both the original mortgage and the subsequent settlement agreement were accepted by the parties in writing and both contained bilateral obligations. Therefore, the claims in this case are not affected by the D'Oench restrictions.

      . While the Eleventh Circuit has not addressed this issue, the circuits considering this issue have adopted this interpretation. See 281-300 Joint Venture v. Onion, 938 F.2d 35, 39 (5th Cir.1991), cert. denied, 502 U.S. 1057, 112 S.Ct. 933, 117 L.Ed.2d 105 (1992); Rosa v. RTC, 938 F.2d 383, 397-400 (3d Cir.1991), cert. denied, 502 U.S. 981, 112 S.Ct. 582, 116 L.Ed.2d 608 (1991); In re Landmark Land Co. of Oklahoma, 973 F.2d 283 (4th Cir.1992); Gross v. Bell Savings Bank PaSA, 974 F.2d 403 (3d Cir.1992); Telematics International, Inc. v. NEMLC Leasing Corp., 967 F.2d 703, 705-6 (1st Cir.1992); United Liberty Life Ins. Co. v. Ryan, 985 F.2d 1320, 1328-9 (6th Cir.1993); National Trust for Historic Preservation v. FDIC, 21 F.3d 469 (D.C.Cir.1994); Harkness Apartment Owners Corp. v. FDIC, No. 87 Civ. 7080, 1993 WL 138772 (S.D.N.Y. April 26, 1993), aff'd 999 F.2d 538 (2d Cir.1993); See also Shoreline Group v. Commonwealth Fed. S & L Assn., No. 90-6703, 1991 WL 496658 1991 U.S.Dist. LEXIS 20799 (S.D.Fla. Feb. 14, 1991); Broderick Mortgage Co. v. RTC, No. 93-1300-Civ-T-21C, Dkt. 14 (M.D.Fla. Nov. 15, 1993); Continental Bank v. Resolution Trust Corp., No. 92-131 (D.C. April 27, 1993); Dade-Deerwood Assoc., L.P. v. RTC, No. 93-0834 (S.D.Fla. May 20, 1993).


author: PER CURIAM:

text:
    Brenda P. MILES, Plaintiff-Appellant, v. Shirley S. CHATER, Commissioner of Social Security, Defendant-Appellee.
    No. 95-6117.
    United States Court of Appeals, Eleventh Circuit.
    June 11, 1996.

      R. Michael Booker, Birmingham, AL, for Appellant.
    Caryl Privett, Winfield J. Sinclair, U.S. Attorney’s Office, Birmingham, AL, for Ap-pellee.
    Before ANDERSON and BLACK, Circuit Judges, and HENDERSON, Senior Circuit Judge.
   PER CURIAM:

This is an appeal from the judgment of the United States District Court for the Northern District of Alabama affirming the denial of Brenda P. Miles’ application for disability insurance benefits. For the reasons that follow, we reverse and remand for further proceedings.

I. BACKGROUND

Miles applied for disability insurance benefits pursuant to Title II of the Social Security Act, 42 U.S.C. §§ 401 et seq., alleging that she was unable to work'because of depression and numerous physical problems. Her application was denied initially and again after reconsideration. Thereafter, she requested and received a hearing before an Administrative Law Judge (“ALJ”). Following the hearing, the ALJ also denied her claim. The Appeals Council then rejected Miles’ subsequent request for review. The AL J’s decision consequently became the final decision of the Commissioner of Social Security (“Commissioner”). See Chester v. Bowen, 792 F.2d 129, 131 (11th Cir.1986).

The administrative record contains conflicting opinions with respect to the effect of Miles’ physical and mental impairments on her capacity to perform substantial gainful activity. Dr. L. Edward Shehi, Jr., a psychiatrist who evaluated Miles’ mental condition at the behest of her attorney, found that Miles suffered from major depression. In a questionnaire accompanying his diagnosis he reported a “marked” limitation on her ability to perform in a work setting. By contrast, R.J. Kline, Ph.D., a consulting psychologist for the Commissioner, diagnosed a mild adjustment disorder with anxious mood. He found that Miles’ ability to perform work-related activities was “quite good and relatively normal.” (Administrative Record at 221). Similarly, the physicians who evaluated Miles’ physical restrictions came to differing conclusions. David A. McLain, M.D., who examined Miles also at her attorney’s request, opined that Miles was “totally disabled from any employment.” (Id. at 285). Morton S. Rickless, M.D., a consulting physician for the Commissioner, found, on the other hand, that she retained the residual functional capacity to perform tasks associated with sedentary work. (Id. at 237).

In a decision issued after the hearing, the ALJ rejected the evaluations of Drs. Shehi and McLain and credited those of Drs. Kline and Rickless as supported by substantial evidence. The ALJ provided several reasons for this credibility determination, which included an observation that “Dr. McLain’s examinations for Mr. MeCluskey [Miles’ attorney] almost invariably conclude that the person being examined is totally disabled.” (Id. at 29). Based upon the opinions of Kline and Rickless and the other evidence of record the ALJ concluded that Miles could no longer perform her past relevant work, but was able to perform other jobs in the economy. He thus determined that she was not disabled.

After the Appeals Council declined review, Miles filed this action in the district court in accordance with 42 U.S.C. § 405(g). In addition to challenging the merits of the Commissioner’s decision, Miles asserted that the ALJ’s statement concerning McLain’s “invariable” findings on behalf of Social Security claimants represented by MeCluskey was not supported by evidence in the record. The district court observed that, indeed, there was no such proof. The court stated:

What is the source and substantiation of these statements? It is certainly not in this record. Is the ALJ reflecting on his own past experience or merely restating gossip within the Social Security family?
In point of fact, no matter what the provenance of these statements is, they cannot appear sua sponte (if at all) in the final opinion. Their inclusion is both unfair to Miles, who has had no opportunity to rebut them, and gratuitous insults to Dr. Miles [sic] and Murray P. McCluskey, deserved or not. Whether these comments were based in personal experience or personal animosity, they have no place in the disability evaluation process.

(Rl-9 at 16-17). The court concluded, however, that no precedent required reversal of the ALJ’s decision due to these prejudicial statements. The court held that, in spite of the ALJ’s improper comments, the decision should be affirmed because it was supported by substantial evidence.

II. STANDARD OF REVIEW

Our review in a Social Security case is the same as that of the district court. Martin v. Sullivan, 894 F.2d 1520, 1529 (11th Cir.1990). “We may not decide the facts anew, reweigh the evidence, or substitute our judgment for that of the [Commissioner].” Bloodsworth v. Heckler, 703 F.2d 1233, 1239 (11th Cir.1983). Rather, we must defer to the Commissioner’s decision if it is supported by substantial evidence. Id. “Substantial evidence is more than a scintilla, but less than a preponderance. It is such relevant evidence as a reasonable person would accept as adequate to support a conclusion.” Id. (citing, inter alia, Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842, 852 (1971)). If the Commissioner’s decision is supported by substantial evidence we must affirm, even if the proof preponderates against it. Martin, 894 F.2d at 1529. There is no presumption, however, that the Commissioner followed the appropriate legal standards in deciding a claim for benefits or that the legal conclusions reached were valid. Id. Instead, we conduct “an exacting examination” of these factors. Id.

III. DISCUSSION

Miles urges that the decision to deny her application for benefits was not supported by substantial evidence. She also charges that the ALJ erroneously considered evidence outside the record in discounting McLain’s medical opinion, namely, that McLain consistently finds disability in cases of clients represented by her attorney, McCluskey. After careful consideration of her contentions, we conclude that she is entitled to an unbiased evaluation of her claim before another ALJ. We therefore do not reach the issue of whether substantial evidence supported the final decision.

The Social Security Act “contemplates that disability hearings will be individualized determinations based on evidence adduced at a hearing.” Heckler v. Campbell, 461 U.S. 458, 467, 103 S.Ct. 1952, 1957, 76 L.Ed.2d 66, 74 (1983). A claimant is entitled to a hearing that is both full and fair. Clark v. Schweiker, 652 F.2d 399, 404 (5th Cir.1981). The regulations governing Title II dictate that “[a]n administrative law judge shall not conduct a hearing if he or she is prejudiced or partial with respect to any party or has any interest in the matter pending for decision.” 20 C.F.R. § 404.940.

When a claimant objects to the assignment of a particular ALJ to his or her case, he or she must notify the ALJ at the earliest opportunity. Id. If the ALJ withdraws, the Associate Commissioner for Hearings and Appeals or his delegate will appoint another ALJ to conduct the hearing. Id. If the ALJ declines to recuse himself, the claimant may seek reconsideration after the hearing by raising the issue before the Appeals Council. Id.

In the present case, the objectionable comments of the ALJ were made in the opinion issued after the hearing. Consequently, Miles’ earliest opportunity to object was before the Appeals Council. In the brief she submitted to the Appeals Council, she asserted that the ALJ’s statements demonstrated “an obvious bias either against the claimant’s evidence, the claimant herself or the claimant’s attorney.” (Administrative Record at 9). The Appeals Council failed to address this charge in denying her request for review.

The ALJ plays a crucial role in the disability review process. Not only is he duty-bound to develop a full and fair record, he must carefully weigh the evidence, giving individualized consideration to each claim that comes before him. Because of the deferential standard of review applied to his decision-making, the ALJ’s resolution will usually be the final word on a claimant’s entitlement to benefits. The impartiality of the ALJ is thus integral to the integrity of the system. See Johnson v. Mississippi, 403 U.S. 212, 216, 91 S.Ct. 1778, 1780, 29 L.Ed.2d 423, 427 (1971) (citations omitted) (“Trial before ‘an unbiased judge’ is essential to due process.”).

The ALJ’s observations here with respect to the medical opinions rendered by McLain for McCluskey’s clients, without any evidence in support thereof, reflect that the process was compromised in this case. We therefore hold that Miles is entitled to an unbiased reconsideration of her application for benefits before a different ALJ. See 20 C.F.R. § 404.940 (providing as a remedy the holding of a new hearing before another ALJ); see also Ventura v. Shalala, 55 F.3d 900 (3d Cir.1995).

IV. CONCLUSION

Accordingly, we REVERSE the judgment of the district court and REMAND the case to that court with instructions to order a new hearing before another ALJ.

      . Pursuant to the Social Security Independence and Program Improvements Act of 1994, Pub.L. No. 103-296, 108 Stat. 1464, the functions of the Secretary of Health and Human Services with respect to Social Security matters were transferred to the Commissioner of Social Security.

      . The Social Security Act defines disability as the "inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months[.]" 42 U.S.C. § 423(d)(1)(A); see also 20 C.F.R. § 404.1505(a). Substantial gainful activity is "work that — (a) Involves doing significant and productive physical or mental duties; and (b) Is done (or intended) for pay or profit." 20 C.F.R. § 404.1510.

      . The questionnaire defined "marked” as “[a]n impairment which seriously affects ability to function.” (Administrative Record at 217).

      . The ALJ stated also that McLain "concluded (as he usually does) that she was totally disabled.” (Administrative Record at 28) (parenthetical in the original) (record citation omitted).

      . Section 405(g) provides for judicial review of final decisions of the Commissioner made after a hearing.

      . In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir.1981) (en banc), this court adopted as precedent all decision of the former United States Court of Appeals for the Fifth Circuit rendered prior to October 1, 1981.

      . We note that the AO made a similar observation with respect to Miles' psychiatric consultant, Shehi, stating "[a]lthough the assessment by Dr. L. Edward Shehi, Jr., who examined the claimant at the request of Mr. McCluskey, not unexpectedly found marked impairments in all categories due to major depression, the assessment from the treating physicians and the [Commissioner’s] consulting psychologist indicated a much less severe impairment.” (Administrative Record at 28) (record citations omitted).


text:
    BARNETT BANK OF MARION COUNTY, N.A. a national banking association, Plaintiff-Counter-Defendant, Appellant, Cross-Appellee, v. Tom GALLAGHER, Insurance Commissioner of the State of Florida, Fla. Dept. of Insurance, a state agency, Defendants-Appellees, Cross-Appellants, Florida Association of Life Underwriters, Professional Insurance Agents of Florida, Inc., Florida Associations of Insurance Agents, Defendants-Counter-Claimants, Appellees-Cross-Appellants.
    No. 93-3508.
    United States Court of Appeals, Eleventh Circuit.
    June 12, 1996.
    David M. Wells, Peter E. Nicandri, Jacksonville, FL, for appellant.
    David J. Busch, Tallahassee, Florida, Scott A. Sinder, Ann M. Kappler, Arti K. Rai, Washington, DC, J. Robert McClure, Jr., F. Townsend Hawkes, Tallahassee, FL, for ap-pellees.
    Virginia B. Townes, Akerman, Senterfitt & Eidson, P.A., Orlando, Florida, Amicus Brief, for Florida Bankers Association.
    Anthony J. Steinmeyer, Jacob M. Lewis, U.S. Dept, of Justice, Civil Division, Appellate Staff, Washington, DC, Daniel Y. Sumner, Florida Dept, of Insurance, Tallahassee, FL, for cross-appellants.

       Honorable Julie E. Carnes, U.S. District Judge for the Northern District of Georgia, sitting by designation.

   ON REMAND FROM THE SUPREME COURT OF THE UNITED STATES

Before COX, Circuit Judge, FAY, Senior Circuit Judge, and CARNES , District Judge.

PER CURIAM:

Prior report: — U.S. -, 116 S.Ct. 1103, 134 L.Ed.2d 237.

On March 26, 1996, the Supreme Court issued its opinion in this matter. Thereafter, on April 29, 1996 the Court issued its judgment. Pursuant to the ruling this matter is remanded to the district court for proceedings in accordance with the opinion and judgment.

REVERSED and REMANDED.


author: EDMONDSON, Circuit Judge:

text:
    Candace A. BEAUREGARD; Aubrey B. Campbell; May H. Jones; Carolyn C. Whitehead, Plaintiffs-Appellees, v. Thomas OLSON, individually and in his official capacity as Tax Collector of Marion County, Florida, Defendant-Appellant, Marion County, Florida, Defendant.
    No. 95-2091.
    United States Court of Appeals, Eleventh Circuit.
    June 12, 1996.
    Michael K. Grogan, Michael G. Prender-gast, Jacksonville, FL, for appellant.
    David 0. McGovern, Ocala, FL, Thomas W. Dickson, Fechter & Dickson, Tampa, FL, for appellees.

      Before EDMONDSON and DUBINA, Circuit Judges, and LOGAN , Senior Circuit Judge.

       Honorable James K. Logan, Senior U.S. Circuit Judge for the Tenth Circuit, sitting by designation.

   EDMONDSON, Circuit Judge:

This interlocutory appeal is from the denial of Thomas Olson’s motion for summary judgment based on qualified immunity. We reverse the order denying qualified immunity, and we instruct that the district court grant Olson immunity. We also remand for further proceedings.

I.

Defendant Olson has been the Marion County (Florida) Tax Collector since 1971. Plaintiffs are four of his former employees. The Tax Collector — a constitutionally-created elected position — is responsible for collecting taxes. Under Florida law, see Fla.Stat. § 197.103, the Tax Collector is authorized to appoint deputies to act in his behalf in carrying out the duties of the office. Olson deputized all his employees, including Plaintiffs.

In 1992, Olson was opposed for reelection. At the outset, Olson advised all staff members that they were free to support either him or his opponent or to remain neutral. Two of the plaintiffs, Whitehead and Jones, supported Olson’s opponent. The other two plaintiffs, Beauregard and Campbell, say they remained neutral during the campaign.

Olson was reelected. Over three months later, Olson fired five employees, including the four plaintiffs. Olson says that the terminations were based on reasons other than Plaintiffs’ failure to support his reeleetion bid. Asserting these non-political reasons to be pretextual, Plaintiffs sued Olson individually and in his official capacity under 42 U.S.C. § 1983. They claimed that Olson, acting under color of state law, deprived them of their First Amendment right not to be fired for political patronage reasons.

Olson moved for summary judgment; one argument he made was that he was entitled to qualified immunity. The district court granted Olson’s motion, in part because Plaintiffs were deputized employees of the Tax Collector. But, the district court later vacated this order and then denied Olson immunity. In its order denying Olson immunity, the district court wrote only that “it is clear that genuine issues of material fact remain to be resolved in this ease;” the court did not discuss whether, taking all disputed facts in favor of Plaintiffs, it was clearly established that Olson acted unlawfully in firing Plaintiffs.

Olson then filed a motion to reconsider. In the order denying Olson’s motion to reconsider, the district court observed that “plaintiffs have offered evidence that tends to show that they were nothing more than ministerial employees.” And, the district court concluded that the firings of Plaintiffs, “if they occurred for political reasons, would necessarily violate clearly established rights in that it is clear that clerical employees are entitled to the protection Plaintiffs seek.”

II.

For purposes of our review we accept as true both that Plaintiffs’ job duties were ministerial and that Olson fired them for political reasons. Even so, Olson says he is entitled to qualified immunity. So, we have jurisdiction, see Behrens v. Pelletier, — U.S. — , — 116 S.Ct. 834, 842, 133 L.Ed.2d 773 (1996), to decide the core qualified immunity question of whether it was clearly established before Olson acted that he could not lawfully fire these deputized clerical employees of the Tax Collector’s office for political reasons.

Some employees do have a general First Amendment right not to be fired for political patronage reasons. See Elrod v. Burns, 427 U.S. 347, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976) (plurality opinion); and Branti v. Finkel, 445 U.S. 507, 100 S.Ct. 1287, 63 L.Ed.2d 574 (1980). An employee might have this right if political affiliation is not an appropriate requirement for the effective performance of the job. See Branti, 445 U.S. at 518-20, 100 S.Ct. at 1295; see also Terry v. Cook, 866 F.2d 373, 377 (11th Cir.1989).

Olson, holding an office created by the Florida constitution, was empowered by Florida law to appoint deputies. All Plaintiffs were appointed deputies. This fact is important. As deputies, Plaintiffs were authorized, by Florida law, to act on Olson’s behalf in carrying out the duties of the Tax Collector’s office. Olson says that Terry v. Cook makes clear that all deputies who have authority under state law to act on behalf of a state officer can be fired for patronage reasons — regardless of the particular deputies’ historical, actual duties. Plaintiffs, citing to Elrod, swpra, respond that no rule exists permitting all deputies to be lawfully fired on patronage grounds. Instead, they say that what is required is an assessment of Plaintiffs’ actual duties to determine whether, in fact, political loyalty is an appropriate requirement for the effective performance of their jobs.

But, in this qualified immunity case, we need not decide whether these deputized employees empowered by Florida law to act on behalf of the Tax Collector (a constitutional officer who faces partisan elections) can lawfully be fired for patronage reasons regardless of their actual duties. For Olson personally to prevail, it is enough if it was not clearly established that firing Plaintiffs for political patronage reasons would violate federal law. As we explained in Lassiter v. Alabama A & M University, 28 F.3d 1146, 1149 (11th Cir.1994) (en banc), for the law to be clearly established to the point that qualified immunity does not apply, the law must have earlier been developed in such a concrete and factually defined context to make it obvious to every reasonable person in Olson’s place that to fire Plaintiffs would violate federal law.

None of the cases cited to us by Plaintiffs have so developed the law for deputy Tax Collectors in Florida. Plaintiffs rely chiefly on Elrod, Branti, and Terry. Terry, supra, is a case which Olson says actually shows the firings were lawful; and, to say the least, it certainly does not clearly establish the unlawfulness of these firings. Elrod, supra, also does not clearly establish the unlawfulness of Olson’s acts — even though one plaintiff in that case was “Chief Deputy of the Process Division.”

The other important ease cited by Plaintiffs is Branti, supra, where the Supreme Court held unlawful the firings of two assistant public defenders. Branti is not “materially similar” to this case, which involves deputized employees of the Marion County Tax Collector’s office. See Adams v. St. Lucie County Sheriff’s Dept., 962 F.2d 1563, 1575 (11th Cir.1992) (Edmondson, J., dissenting), approved en banc, 998 F.2d 923 (11th Cir.1993) (facts of prior cases must be “materially similar” to clearly establish law).

Violations of the constitutional right at issue in this case (the First Amendment right not to be fired for patronage reasons) are determined based on a standard “framed in vague and sweeping language certain to create vast uncertainty.” Branti, 445 U.S. at 522-24, 100 S.Ct. at 1297 (Powell, J. dissenting). In the light of such a vague standard, “elected and appointed officials at all levels ... no longer ... know when political affiliation is an appropriate consideration in filling a position.” Id. at 522-26, 100 S.Ct. at 1297-98.

Justice Powell’s concerns in Branti do not make Branti any less the law, but they do help explain why we have observed that “defendants who allegedly violate public employees’ First Amendment freedoms rarely act within ‘clearly established’ contours of law.” Hansen v. Soldenwagner, 19 F.3d 573, 575 (11th Cir.1994). This case is not the exceptional case where the individual defendant is unentitled to qualified immunity: it was not clearly established at the time Olson acted that firing Plaintiffs was unlawful.

The order denying Olson, in his personal capacity, summary judgment based on qualified immunity is vacated; we remand for further proceedings and instruct that Olson be granted qualified immunity.

VACATED AND REMANDED.

      . We also accept as true the undisputed facts that Plaintiffs were employees of the Tax Collector’s Office who were deputized under Florida law. This circumstance was noted in the district court’s initial order granting summary judgment and not later contradicted.

      . Olson points us to the special status Florida law affords deputies. See Blackburn v. Brorein, 70 So.2d 293, 296 (Fla.1954) (en banc); Murphy v. Mack, 358 So.2d 822, 825 (Fla.1978); Florida Public Employees Council 79, AFSCME v. Martin County Property Appraiser, 521 So.2d 243 (Fla.Dist.Ct.App.1988).

      . Olson also relies on Martin County Property Appraiser, 521 So.2d 243, where the court concluded that the "determinative factor” (that is, the factor which led the court to conclude deputy property appraisers were not “employees”) was the power inherent in the plaintiffs' deputy status, not whether individual deputies "actually exercise a plenary range of duties." Id. at 244. This was so even where the deputies “primarily exercise[d] clerical duties.” Id. The Martin County court concluded that employees empowered to "act on [the Property Appraiser’s] behalf in carrying out the duties prescribed by law for that office” are the "alter ego” of the property appraiser. Id.

        . Whether or not Olson subjectively believed that political loyalty was required for Plaintiffs to do their jobs effectively does not matter. See Lassiter v. Alabama A & M University, 28 F.3d 1146, 1150 (11th Cir.1994) (en banc) ("subjective intent of government actor defendants plays no part in qualified immunity analysis”).

      . In Terry, 866 F.2d 373, we found no violation of First Amendment rights — an Alabama sheriff was permitted to fire all deputies. The Terry court did not undertake a searching assessment of the individual deputies’ actual duties. It also did not hold unlawful the firings of the non-deputy "ministerial” workers in the sheriff's office. See note 6, infra, on the hurdles facing a plaintiff seeking to use a remand case to clearly establish the contours of a federal right.

      . No opinion in Elrod discussed whether the Chief Deputy of the Process Division had the power to act on behalf of the Sheriff in carrying out the duties of the office of Sheriff. How close Florida law and Illinois law are on the point of the legal significance of deputization is, itself, unclear. And, given the differences between the Cook County Sheriff's office and the Marion County Tax Collector’s office, we doubt Elrod is "materially similar” enough to this case to establish clearly the applicable law. Most important, however, Elrod — although saying that preliminary injunctive relief was appropriate — did not finally decide that the Chief Deputy had some right not to be fired by the Sheriff. Instead, the Supreme Court in Elrod affirmed the Seventh Circuit’s remand of the case for the determination of whether or not the plaintiffs’ rights were violated. Elrod, 427 U.S. at 371-73, 96 S.Ct. at 2689-90.
      Remand cases such as Elrod (and also Terry) are of little use to the plaintiff who faces a qualified immunity defense and who must show that the case law has clearly established the unlawfulness of the government actor’s decision under the circumstances. This idea is so because such cases do not hold that the government actor behaved unlawfully. For example, in Elrod the district court might have decided on remand that the firing of the Chief Deputy was lawful solely because he was empowered — as plaintiffs are here — to act instead of his employer. (By the way, it seems no court ever concluded the firing of any Elrod plaintiff to have been unlawful; the case settled before trial. See Burns v. Elrod, 757 F.2d 151, 153 (7th Cir.1985).)

      . The office of Marion County, Florida Tax Collector is charged with a materially different function than the office at issue in Branti (the Rock-land County, New York Public Defender.) And, the need for political loyalty may be different between such different kinds of offices.
      The limits of Branti were made clear by the Court's focus on the kind of workers involved in that case: public defenders. The Court observed that the “primary, if not the only, responsibility of an assistant public defender is to represent individual citizens in controversy with the State.” Branti, 445 U.S. at 518-20, 100 S.Ct. at 1295. The office of the public defender was contrasted with offices which have "broader public responsibilities.” Id. at 518-19 n. 13, 100 S.Ct. at 1295 n. 13. The office of Tax Collector might be such an office. And, no discussion exists in Branti on whether the assistant public defenders were statutorily authorized to act on the Public Defender’s behalf in carrying out the duties of the office.
      In the end, the facts of Branti and the facts of this case are different enough to cloud the question whether Olson's acts were unlawful when he acted.

      . Olson also asks us to order the entry of summary judgment in his favor in the suit against him in his official capacity. We decline to address this claim.


author: TJOFLAT, Chief Judge:

text:
    UNITED STATES of America, Plaintiff-Appellee, v. Fernand TOUSSAINT, Defendant-Appellant.
    No. 95-4207
    Non-Argument Calendar.
    United States Court of Appeals, Eleventh Circuit.
    June 12, 1996.
    Kathleen Williams, Federal Public Defender, Paul Korchin, Helen Trainor, Asst. Federal Public Defenders, Miami, FL, for appellant.
    Kendall Coffey, U.S. Attorney, Adalberto Jordan, Linda Collins Hertz, Dawn Bowen, Anne Ruth Schultz, Asst. U.S. Attorneys, Miami, FL, for appellee.
    Before TJOFLAT, Chief Judge, and KRAVITCH and COX, Circuit Judges.
   TJOFLAT, Chief Judge:

Fernand Toussaint appeals his convictions for conspiracy to make materially false statements to the Small Business Administration (“SBA”) in violation of 18 U.S.C. § 371 (Count I), and for making false statements to the SBA in violation of 18 U.S.C. § 1001 (Count II). He also appeals the sentences he received. We affirm.

I.

Toussaint seeks a new trial on both counts of the indictment because the district court, in charging the jury on the elements of the alleged offenses, failed to instruct the jury that it could not convict appellant of either offense unless it found that the false statements he allegedly made to the SBA were “material.” See United States v. Gaudin, -U.S.-,-, 115 S.Ct. 2310, 2320, 132 L.Ed.2d 444 (1995). Toussaint did not object at trial to the court’s failure to submit the materiality issue to the jury; accordingly, we review for plain error. See United States v. Kramer, 73 F.3d 1067, 1074 (11th Cir.1996). In short, Toussaint must demonstrate that the district court’s failure to submit the issue of materiality to the jury “affected his substantial rights (that is, affected the outcome of his trial).” Id.

Gaudin does not apply to the Count I offense; materiality is not an element of a section 371 offense. Moreover, regardless of whether materiality is an element of a section 371 or a section 1001 offense, we conclude that Toussaint has failed to show that the failure to submit the issue of materiality to the jury affected the outcome of his trial. The statements in question were made by Toussaint in a disaster loan application to the SBA. Toussaint stated that he had suffered physical losses of over $360,000 as a result of damage caused by Hurricane Andrew; in fact, Toussaint had suffered no losses. Had the SBA believed his false representations, it would have given Toussaint a disaster loan in an amount in excess of $360,-000. The materiality of Toussaint’s statements was self-evident, uncontested, and unrefuted. We have no doubt that the jury would have found the statements material, had it been called upon to decide the issue. In sum, there is no plain error in this case.

II.

Toussaint’s scheme was uncovered while his loan application was being processed; hence, the SBA suffered no actual loss. The district court, however, found that Toussaint fully intended that a loss occur— that is, Toussaint had no intention of paying off the loan. At sentencing, the court stated:

This Court has observed on more than even several occasions in recent months that this nation is sorely beset with this type of fraud. For the record, I do not find the explanation of the defendant credible. I did not find his explanation during the course of trial ... credible. I am in full accord with the verdict of the jury.... Mr. Toussaint, I do not accept your explanation that you never intended to impose some sort of fraud upon the government of the United States. I think that was your intention from the very beginning.

Accordingly, the district court increased Toussaint’s base offense levels by nine levels because Toussaint intended that the SBA incur a loss in the amount of the contemplated disaster loan. See U.S.S.G. § 2Fl.l(b)(l)(J) (1995).

Toussaint contends that unless a loss has actually occurred, a sentencing court is precluded from considering any loss that he may have intended. As Toussaint states in his reply brief, an “offense adjustment [under section 2F1.1, see § 2F1.1 comment, (n. 7) (1995) ] depends solely on ... whether certain dollar amounts were lost. It is only after eligibility for an offense adjustment based on some actual dollar loss has been established that intended harm in excess of that amount may be considered.” We disagree.

The district court’s interpretation of the Sentencing Guidelines is a question of law which we review de novo. United States v. Goldberg, 60 F.3d 1536, 1538-39 (11th Cir.1995). The calculation of amount of loss for sentencing purposes is a factual determination reviewable for clear error. United States v. Menichino, 989 F.2d 438, 440 (11th Cir.1993).

The commentary to section 2F1.1 instructs that “[i]n fraudulent loan application cases ... the loss is the actual loss to the victim (or if the loss has not yet come about, the expected loss).... [WJhere the intended loss is greater than the actual loss, the intended loss is to be used.” U.S.S.G. § 2F1.1, comment, (n. 7) (1995). Nowhere does the commentary require or even suggest that some actual loss must occur before any intended loss may be considered. In fact, the plain language indicates that the contrary is true. It strikes us as improper to reward a defendant with a lesser punishment because of the fortuity that he was caught before he was able to cause the victim to suffer the loss. The fact that no loss occurred is immaterial to the inquiry of whether Toussaint intended to keep the loan amount; it is this intent, whether or not brought to fruition, that the enhancement is meant to address.

Our precedent also dictates this conclusion. In United States v. Menichino, 989 F.2d 438 (11th Cir.1993), the defendant obtained a fraudulent appraisal for his power boat. An undercover agent who was to purchase the boat had asked Menichino to procure a higher appraisal value so that the agent could then use it to secure a loan from a bank. Despite that no loan was ever issued and that therefore “there was no actual loss,” id. at 442, we found that the district court properly enhanced Meniehino’s sentence under section 2F1.1.

The district court found that Toussaint intended to pocket the entire amount of the loan. This finding is supported by the evidence, and is not clearly erroneous. Because Toussaint intended that the government sustain a loss in the amount of the loan he was seeking from the SBA, it was proper for the district court to consider the full amount of the prospective loan as the “loss” for purposes of section 2F1.1.

AFFIRMED.

      . Toussaint received concurrent 30-month prison sentences, to be followed by two concurrent three-year terms of supervised release, and was ordered to pay a $5,000 fine ($2,500 per count) and a $100 assessment.

      . U.S.S.G. § 2Fl.l(a) sets the base offense level at 6 for crimes involving fraud and deceit. In addition to the 9-point increase for the amount of loss intended, the court added two points to the base offense level because the offense required more than minimal planning, see § 2F 1.1 (b)(2)(A). Toussaint’s total offense level was thus 17.

      . There was no evidence in Menichino that the defendant believed the loan would never be repaid. The district court instead justified the enhancement on the ground that "[p]roof that the defendant intentionally induced a bank to unknowingly subject itself to the risk of default is sufficient to establish that the defendant intended to cause a loss.” Id. at 442. Counsel for Tous-saint attempts to distinguish Menichino because "this form of loss calculation does not apply when, in cases such as this, the purpose of the loan is for disaster relief and the loan is made by a government agency precisely because the risk exposure is one which would not be assumed by a private lender." Even assuming this is true, we are not relying on Menichino for the manner in which it calculates losses; rather, the district court's enhancement in this case was based on the more basic proposition that the defendant never intended to pay back the loan, and thus the loan amount is the loss. Menichino does support the proposition that irrespective of the manner in which intended loss is calculated, it may form the basis of an enhancement even in the complete absence of actual loss.


author: PAULINE NEWMAN, Circuit Judge.

text:
    HOOVER GROUP, INC., Plaintiff-Appellee, v. CUSTOM METALCRAFT, INC., and Dwayne Holden, Defendants-Appellants.
    No. 94-1285.
    United States Court of Appeals, Federal Circuit.
    May 24, 1996.

      Timothy C. Russell, Sonnensehein Nath & Rosenthal, Washington, D.C., argued, for plaintiff-appellee. With him on the brief was Faith H. Spencer.
    Dennis L. Thomte, Zarley, McKee, Thomte, Voorhees & Sease, Omaha, Nebraska, argued, for defendants-appellants.
    Before ARCHER, Chief Judge, and NEWMAN and CLEVENGER, Circuit Judges.
   PAULINE NEWMAN, Circuit Judge.

Mr. Dwayne Holden appeals the decisions of the United States District Court for the District of Nebraska, (1) denying his motion to dismiss the complaint against him as an individual for improper venue and (2) holding him personally liable for infringement of Hoover’s United States Patents Nos. 4,840,-284 and 4,785,95s. We affirm the decision that venue was proper, and reverse the judgment of personal liability.

I

VENUE

Hoover Group, Inc. (Hoover) and Custom Metalcraft, Inc. (Custom) both manufacture tanks for the storage and transportation of materials. Hoover sued Custom for patent infringement, the cause was tried, and the district court held that the two Hoover patents in suit were valid and that both patents were infringed by certain of Custom’s tanks. On appeal the Federal Circuit affirmed the decision as to validity of both patents and infringement of the ’284 patent, and reversed the decision of infringement of the ’958 patent. Hoover Group, Inc. v. Custom Metalcraft, Inc., 66 F.3d 299, 36 USPQ2d 1101 (Fed.Cir.1995).

In a Second Amended Complaint that was filed after the district court had reached its decision of infringement, Hoover charged Mr. Holden with personal liability for infringement and inducement to infringe the Hoover patents. Mr. Holden was the president, chief executive officer, and principal shareholder of Custom. The complaint alleged that he made all major decisions concerning the business involved in this lawsuit; this allegation is accepted as true for venue purposes.

Venue is based on the facts alleged in the well-pleaded complaint. See Dody v. Brown, 659 F.Supp. 541, 544 n. 2 (W.D.Mo.1987) (“in deciding the question of the defendants’ contacts with this district for venue purposes, the Court will accept as true the facts pleaded in plaintiffs’ complaint”); McGhan v. F.C. Hayer Co., 84 F.Supp. 540, 541 (D.Minn.1949) (the plaintiffs need plead only “ultimate facts that sufficiently allege venue so as to sustain the Court’s jurisdiction”). The district court denied Mr. Holden’s motion to dismiss the Second Amended Complaint, ruling that sufficient facts were alleged to support personal jurisdiction and venue. Mr. Holden does not contest personal jurisdiction, but argues that venue is improper.

Venue in patent infringement trials is proper in any judicial district “where the defendant resides or where the defendant has committed acts of infringement and has a regular and established place of business.” 28 U.S.C. § 1400(b). As discussed in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 16 USPQ2d 1614 (Fed.Cir.1990), cert. denied, 499 U.S. 922, 111 S.Ct. 1315, 113 L.Ed.2d 248 (1991), for venue purposes the residence of corporate defendants in patent infringement actions is governed by 28 U.S.C. § 1391(c), as amended in 1988. However, venue as to corporate employees charged with personal liability for acts taken as individuals, not as the alter ego of the corporation, does not flow automatically to forums in which venue is proper as to the corporation.

Venue requirements exist for the benefit of defendants, VE Holding, 917 F.2d at 1576, 16 USPQ2d at 1615. When the cause of action is personal to the individual defendant, the venue requirement must be met as to that defendant. 1A(2) J. Moore et ah, Moore’s Federal Practice ¶ 0.340 (2d ed.1995). In comparison, venue for personal liability of a corporate officer/owner for acts of infringement by the corporation, whether or not the facts support piercing the corporate veil, may reasonably be based on the venue provisions for the corporation, 28 U.S.C. §§ 1400(b) and 1391(c). See Minnesota Mining & Mfg. Co. v. Eco Chem, Inc., 757 F.2d 1256, 1265, 225 USPQ 350, 356 (Fed.Cir.1985) (“The precedents establish that a court which has jurisdiction over a corporation has jurisdiction over its alter egos.”).

The district court, discussing Mr. Holden’s ease, did not distinguish between the charges of inducement to infringe and direct infringement, and did not require that the corporate veil be penetrated. However, the allegations of the complaint with respect to Mr. Holden’s ownership, control, and active management of the corporation provide sufficient basis for finding that venue was proper under §§ 1400(b) and 1391(e). We have given weight to the convenience of parties and courts in this subsidiary action, wherein the issues of infringement were tried to the same court now considering Mr. Holden’s personal liability for infringement. We have also given deference to the ruling of the district court that, on the pleadings, venue as to Mr. Holden was proper in Nebraska. The decision on this issue is affirmed.

II

LIABILITY

The district court found Mr. Holden personally liable for the infringement by the corporation, relying on Orthokinetics, Inc. v. Safety Travel Chairs, Inc., 806 F.2d 1565, 1 USPQ2d 1081 (Fed.Cir.1986). In Orthoki-netics the Federal Circuit found the officers of that corporation personally liable for the infringement by the corporation, applying the “general principles relating to piercing the corporate veil.” 806 F.2d at 1579, 1 USPQ2d at 1090. However, acts of a corporate officer that are within the scope of the officer’s responsibility are not always sufficient grounds for penetrating the corporate protection and imposing personal liability. See Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 553, 16 USPQ2d 1587, 1594 (Fed.Cir.1990). The policy considerations that underlie the corporate structure yield to personal liability for corporate acts only in limited circumstances.

In general, a corporate officer is personally liable for his tortious acts, just as any individual may be liable for a civil wrong. This general rule “does not depend on the same grounds as ‘piercing the corporate veil,’ that is, inadequate capitalization, use of the corporate form for fraudulent purposes, or failure to comply with the formalities of corporate organization.” Crigler v. Salac, 438 So.2d 1375, 1380 (Ala.1983) (citing L.C.L. Theatres, Inc. v. Columbia Pictures Indus., Inc., 619 F.2d 455 (5th Cir.1980)). When personal wrongdoing is not supported by legitimate corporate activity, the courts have assigned personal liability for wrongful actions even when taken on behalf of the corporation. However, this liability has been qualified, in extensive jurisprudence, by the distinction between commercial torts committed in the course of the officer’s employment, and negligent and other culpable wrongful acts.

Thus when a person in a control position causes the corporation to commit a civil wrong, imposition of personal liability requires consideration of the nature of the wrong, the culpability of the- act, and whether the person acted in his/her personal interest or that of the corporation. See 3A William Meade Fletcher, Fletcher Cyclopedia of the Law of Private Corporations §§ 1134-1166 (1994 Revised Volume) (XXIX “Liability of Officers and Directors to Third Persons for Torts”). The decisions have not always distinguished among the various legal premises, le. (1) justification for piercing the corporate veil based on such criteria as absence of corporate assets or use of the corporate form for illegal purposes; (2) corporate commitment of a commercial tort (such as interference with contract or business advantage, or patent infringement) caused by the officer acting as agent of the corporation; (3) actions similar to (2) but exacerbated by culpable intent or bad faith on the part of the officer; or (4) personal commitment of a fraudulent or grossly negligent act.

For example, corporate officers have been held personally liable when they participated in conversion, id. § 1140, breach of fiduciary duty, id. § 1141, fraud, id. § 1143, and malicious prosecution, id. § 1160; and have been held not to be personally liable for commercial torts such as interference with contractual relations if they were acting in the corporation’s interest, id. § 1158.10. The fact-dependency of such issues is apparent in decisions relating to patent infringement. Compare Fromson v. Citiplate, Inc., 886 F.2d 1300, 1304, 12 USPQ2d 1299, 1303 (Fed.Cir.1989) (finding personal liability of corporate officers/owners who gave false assurances of corporate solvency) with Manville Sales, 917 F.2d at 553, 16 USPQ2d at 1594 (it must be shown that corporate officers knew the acts would be infringing in order to incur personal liability for inducing infringement). In Manville Sales the court stated that “to be personally liable for Paramount’s infringement under section 271(a), there must be evidence to justify piercing the corporate veil.” Id. at 552, 16 USPQ2d at 1593.

In the case at bar it was not alleged that Custom’s corporate structure was a sham, or existed merely to shield Mr. Holden from liability for “fraud or wrong” or violation of any legal duty. See generally 1 Fletcher § 41.10 (discussing the alter ego doctrine). Although Mr. Holden, as the chief executive officer and principal owner, can be viewed as controlling Custom’s commercial activities, the district court did not pierce the corporate veil. However, the record shows that Mr. Holden made a straightforward commercial response to the assertions of patent infringement, including prompt consultations with counsel. It must be recognized that there were differences between the patented and the accused structures; it is relevant that we have reversed the district court’s finding of infringement as to one of the two patents in suit.

The district court also relied on 35 U.S.C. § 271(b), which provides that “whoever actively induces infringement of a patent shall be liable as an infringer,” and on this court’s ruling that for a corporate officer to be personally liable for inducing infringement, it is not necessary that the corporate veil be pierced. Orthokinetics, Inc. v. Safety Travel Chairs, Inc., 806 F.2d 1565, 1578-79, 1 USPQ2d 1081, 1090 (Fed.Cir.1986). However, the officer must act culpably in that the officer must actively and knowingly assist with the corporation’s infringement. Water Technologies Corp. v. Calco, Ltd., 850 F.2d 660, 668, 7 USPQ2d 1097, 1103 (Fed.Cir.1988) (the officer must have possessed specific intent to “aid and abet” infringement). It is an insufficient basis for personal liability that the officer had knowledge of the acts alleged to constitute infringement. Manville Sales, 917 F.2d at 553, 16 USPQ2d at 1594 (Fed.Cir.1990); Hewlett-Packard Co. v. Bausch & Lomb Inc., 909 F.2d 1464, 1468-69, 15 USPQ2d 1525, 1528-29 (Fed.Cir.1990); Fletcher § 1137.

In sum, unless the corporate structure is a sham, as is not here asserted, personal liability for inducement to infringe is not automatic but must be supported by personal culpability. The district court did not find bad faith or fraud or culpable intent on the part of Mr. Holden. The court erred in imposing liability although the corporate veil was not pierced. The ruling that Mr. Holden is personally liable for Custom’s infringement is reversed.

Costs to Mr. Holden.

REVERSED.

      . Hoover Group, Inc. v. Custom Metalcraft, Inc., No. 4:CV91-3053 (D.Neb. Nov. 24, 1993); Hoover Group, Inc. v. Custom Metalcraft, Inc., No. 4:CV91-3053 (D.Neb. Apr. 14, 1994).