Court Opinion

ID: 9383591
Source: CourtListenerOpinion
Date Created: 2023-03-30 19:01:07.019266+00
Date Added: 2024-06-11T17:17:46.573682
License: Public Domain

USCA11 Case: 22-12081      Document: 42-1      Date Filed: 03/30/2023    Page: 1 of 11

                                                    [DO NOT PUBLISH]
                                      In the
                 United States Court of Appeals
                           For the Eleventh Circuit

                            ____________________

                                   No. 22-12081
                             Non-Argument Calendar
                            ____________________

        MICHAEL MCEVOY,
        on behalf of himself and others similarly situated,
                                                         Plaintiff-Appellant,
        versus
        APOLLO GLOBAL MANAGEMENT LLC,
        a Delaware limited liability company,
        APOLLO MANAGEMENT VI, L.P.,
        a Delaware limited partnership,
        CEVA GROUP, PLC,

                                                     Defendants-Appellees,
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        2                        Opinion of the Court                    22-12081

        GARETH TURNER, et al.,

                                                                     Defendants.

                              ____________________

                    Appeal from the United States District Court
                         for the Middle District of Florida
                     D.C. Docket No. 3:17-cv-00891-TJC-MCR
                             ____________________

        Before WILSON, NEWSOM, and GRANT, Circuit Judges.
        PER CURIAM:
               Plaintiff-Appellant Michael McEvoy appeals the district
        court’s order denying his request for discovery to support his bur-
        den of proof on various statute of limitations issues. McEvoy also
        appeals the district court’s order granting Apollo Global Manage-
        ment, Inc.; Apollo Management VI, L.P; and CEVA Group PLC’s
        (collectively Appellees) motion for summary judgment. After care-
        ful review, we affirm.1

        1 McEvoy has petitioned for an initial hearing en banc, pursuant to Federal
        Rule of Appellate Procedure 35. No Judge in regular active service on this
        Court has requested that the Court be polled about en banc consideration.
        McEvoy’s petition for hearing en banc is DENIED.
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        22-12081                  Opinion of the Court                             3

                                          I.
                McEvoy worked for Customized Transportation, which
        Apollo Global Management, Inc. and Apollo Management VI, L.P
        (collectively Apollo) purchased. In 2006, Apollo merged with EGL,
        Inc. to form CEVA Logistics, a subsidiary of CEVA Group involved
        in global freight management and supply chain logistics. Until
        2013, CEVA Group itself was 99.9 percent owned by CEVA Invest-
        ments Limited (CIL), a Cayman Islands corporation. In 2006,
        CEVA Logistics asked McEvoy and other management-level em-
        ployees to purchase equity in CIL through a fund called the 2006
        Long-Term Incentive Plan (2006 LTIP). When McEvoy invested
        approximately $10,000 in 2006 LTIP, he received and reviewed the
        2006 LTIP Agreement.
               Around mid-2012, CEVA Group faced financial problems
        and determined that financial restructuring was the only way for it
        to survive. In what we refer to here as the 2013 Transaction, CEVA
        Group converted much of CIL’s debt into equity ownership of a
        new entity called CEVA Holdings, LLC (CEVA Holdings). The
        transaction effectively wiped out all previous investment in CIL,
        including the 2006 LTIP shares’ value. 2

        2 Ultimately, CEVA Holdings developed a 2013 LTIP, which allowed certain
        employees to received stock options and other employees to receive cash pay-
        ments and became effective on June 11, 2013. But the benefits provided in the
        2013 LTIP did not apply to any former employees of CEVA Group. CEVA
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        4                        Opinion of the Court                    22-12081

               CEVA Group’s financial troubles also spelled trouble for
        McEvoy. First, in December 2012, CEVA Logistics informed
        McEvoy that he would be laid off in March 2013. On January 21,
        2013, McEvoy exercised his right to sell his 2006 LTIP shares and
        received notice the next day that CEVA would purchase the shares
        back on April 1, 2013. McEvoy also learned that the value for each
        share was around 50 Euros (€). Then on April 5, 2013, McEvoy
        received a letter stating that “[t]he directors of [CIL] have received
        advice from valuation and restructuring professionals that [CIL’s]
        shareholding in CEVA is now without value, in consequence of the
        financial condition of CEVA. You may have seen, or shortly will
        see, press announcements concerning the proposed restructuring
        of CEVA.”
                McEvoy received at least three letters between April 8, 2013
        through June 14, 2013, discussing the liquidation proceedings of
        CIL in the Cayman Islands and the involuntary Chapter 7 bank-
        ruptcy proceeding against CIL in the Southern District of New
        York (filed in April 2013). In the bankruptcy proceeding, the Chap-
        ter 7 trustee alleged that Apollo orchestrated a fraudulent transfer
        of CIL’s interest in CEVA Group to CEVA Holdings without con-
        sideration, naming CIL directors Gareth Turner and Mark Beith,
        CEVA Group, and CEVA Holdings as defendants.

        Holdings’ 2013 Annual Report, released on February 28, 2014, also discussed
        the new 2013 LTIP plan.
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        22-12081               Opinion of the Court                        5

                On August 3, 2017, McEvoy filed a putative class action law-
        suit in the Middle District of Florida against Apollo Global Manage-
        ment and the CIL directors (Turner and Beith), alleging self-dealing
        and fraudulent conversion. The Chapter 7 bankruptcy trustee
        moved to enjoin McEvoy’s case, arguing the claims asserted were
        derivative claims that were property of CIL’s estate. In re CIL Ltd.,
        No. 13-11272-JLG, 2018 WL 878888, at *1 (Bankr. S.D.N.Y. Feb. 9,
        2018). The Bankruptcy Court agreed, declaring McEvoy’s putative
        class action in this Court “null and void ab initio.” Id. at *12. But
        the Bankruptcy Court allowed McEvoy to file a proposed amended
        complaint asserting direct claims in the Middle District of Florida.
               On December 7, 2018, McEvoy filed his amended class ac-
        tion complaint, which removed the two CIL directors and added
        CEVA Group and Apollo Management VI, L.P. The amended
        complaint also included another claim that the named defendants
        caused putative class members “to not receive, or not equally re-
        ceive, a required adjustment” as part of CEVA’s 2013 restructuring.
               Appellees moved to dismiss McEvoy’s amended complaint,
        but the district court converted those motions to a motion for sum-
        mary judgment and ordered limited discovery on the statute of lim-
        itations. During the limited discovery, McEvoy moved to compel
        production from twelve broad categories of documents from
        Apollo. The district court struck Apollo’s general objections but
        denied McEvoy’s motion to compel.
               Following discovery, the district court initially denied Ap-
        pellees’ converted motion for summary judgment. However,
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        6                         Opinion of the Court                      22-12081

        Appellees sought reconsideration under Federal Rule of Civil Pro-
        cedure 59(e), and the district court ultimately granted the Appel-
        lees’ motion for reconsideration and their motion for summary
        judgment. McEvoy timely appealed. 3
                                           II.
                First, we turn to McEvoy’s argument regarding the district
        court’s denial of his discovery requests. McEvoy contends that the
        district court abused its discretion when it denied his motion to
        compel discovery. Specifically, McEvoy argues that the denial sub-
        stantially harmed him by precluding the development of a full rec-
        ord on many issues, including his tolling theories.
               Despite Appellees’ arguments related to McEvoy’s compli-
        ance with Federal Rule of Civil Procedure 56(d), McEvoy did not
        ask the district court to postpone ruling on the summary judgment
        until he could complete further discovery.4 Thus, our review is

        3 Appellees moved to file demonstrative evidence in this case. Specifically,
        Appellees seek to enter a redline version comparing the original complaint
        with the amended complaint. McEvoy does not oppose this request. Thus,
        Appellees’ motion to file demonstrative evidence is GRANTED, and the red-
        line evidence has been reviewed in consideration of this appeal.
        4 In his response to Appellees’ motion for summary judgment, McEvoy drops
        a footnote saying that because he could not conduct discovery, the facts relied
        on by Appellees are disputed and should not be relied on. Even if McEvoy’s
        single footnote in his response to summary judgment can be construed as re-
        quest under Rule 56(d), McEvoy has failed to meet his burden. “[T]he party
        opposing the motion for summary judgment bears the burden of calling to the
        district court’s attention any outstanding discovery.” Snook v. Tr. Co. of Ga.
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        22-12081                    Opinion of the Court                                 7

        cabined to whether the district court abused its discretion in deny-
        ing McEvoy’s motion to compel. See Josendis v. Wall to Wall Res-
        idence Repairs, Inc., 662 F.3d 1292, 1306 (11th Cir. 2011) (“The dis-
        trict court has broad discretion under Federal Rule of Civil Proce-
        dure 26 to compel or deny discovery; we therefore review the
        court’s discovery rulings for an abuse of that discretion.”).
               Here, the district court did not abuse its broad discretion
        managing the limited discovery it ordered. Because the district
        court converted Appellees’ motion to dismiss to a motion for sum-
        mary judgment, it contemporaneously ordered limited discovery
        on the statute of limitations issue raised by Appellees. Reviewing
        the record, McEvoy sought to take the district court’s allowance
        for discovery on this issue well past its intentionally limited scope.
        As the Appellees correctly point out, McEvoy sought discovery
        that would help him prevail on his underlying claim, which is be-
        yond the type of discovery permitted by the district court. Ulti-
        mately, the district court is in the best position to review requests
        for additional discovery and to determine whether they are propor-
        tional to the needs of the case. See Fed. R. Civil P. 26(b)(1). Here,
        the district court did not abuse its position.

        Bank of Savannah, N.A., 859 F.2d 865, 871 (11th Cir. 1988). “The preferred
        vehicle for advising a district court of the need for further discovery is an affi-
        davit or declaration submitted under Federal Rule of Civil Procedure 56(d).”
        City of Miami Gardens v. Wells Fargo & Co., 931 F.3d 1274, 1287 (11th Cir.
        2019). McEvoy did not submit an affidavit or a declaration to the district court
        explaining what additional discovery he needed.
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        8                       Opinion of the Court                 22-12081

                Further, McEvoy cannot show that there was substantial
        harm to his case. See Iraola & CIA, S.A. v. Kimberly–Clark
        Corp., 325 F.3d 1274, 1286 (11th Cir. 2003) (noting that we do not
        reverse discovery decisions unless the challengers demonstrate that
        those decisions resulted in substantial harm to their case). The dis-
        trict court’s determination on summary judgment turned on how
        the statute of limitations impacted McEvoy’s claims. As discussed
        below, the district court concluded that McEvoy was on inquiry
        notice about his prospective claims. Thus, failure to provide
        McEvoy with additional discovery would not have caused him sub-
        stantial harm (especially in light of the fact that several of the doc-
        uments that put McEvoy on inquiry notice were in McEvoy’s pos-
        session).
              Thus, the district court did not abuse its discretion in deny-
        ing McEvoy’s motion to compel.
               Next, we turn to McEvoy’s arguments regarding the district
        court’s grant of summary judgment in favor of Appellees. “‘We
        review the district court’s grant of summary judgment de novo,
        viewing all facts and drawing all inferences in the light most favor-
        able to’ the nonmoving party.” Pelaez v. Gov’t Emps. Ins. Co., 13
        F.4th 1243, 1249 (11th Cir. 2021) (quoting Eres v. Progressive Am.
        Ins. Co., 998 F.3d 1273, 1278 n.3 (11th Cir. 2021)); see also St. Louis
        Condominium Ass’n, Inc. v. Rockhill Ins. Co., 5 F.4th 1235, 1242
        (11th Cir. 2021) (reviewing a motion to amend judgment under
        Federal Rule of Civil Procedure 59(e) for abuse of discretion unless
        the ruling turns on a question of law that is reviewed de novo).
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        22-12081                   Opinion of the Court                               9

               McEvoy marshals two arguments. First, McEvoy contends
        that the district court erred when it found that his amended com-
        plaint did not relate back to his initial complaint under Federal Rule
        of Civil Procedure 15(c). 5 Second, McEvoy argues that the district
        court erred when it held that he was on inquire notice of his claims
        as a matter of law.
                Even assuming arguendo that the district court incorrectly
        found that McEvoy’s amended complaint did not relate back, we
        can still affirm the district court’s order because there is no genuine
        issue of material fact that McEvoy was on inquiry notice of his
        claims before August 3, 2014. See Stewart v. Happy Herman’s
        Chesire Bridge, Inc., 117 F.3d 1278, 1285 (11th Cir. 1997) (“[W]e
        may affirm the district court’s grant of summary judgment on any
        adequate ground, even if it is other than the one on which the dis-
        trict court actually relied.”).

        5 McEvoy argues that we use the wrong standard of review when determining
        whether an amended complaint relates back to the initial complaint under
        Federal Rule of Civil Procedure 15(c). This circuit uses the abuse of discretion
        standard for reviewing Rule 15(c) determinations by a district court. See, e.g.,
        Powers v. Graff, 148 F.3d 1223, 1226 (11th Cir. 1998). Ten other circuits use a
        de novo standard of review. See United States v. Alaniz, 5 F.4th 632, 635 n.2
        (5th Cir. 2021) (noting that while it was an open question in the Fifth Circuit
        whether a relation-back decision should be subject to de novo or abuse-of-
        discretion review, every circuit except the Eleventh Circuit uses de novo re-
        view). Because we assume without deciding that the district court erred in its
        relation-back inquiry, we need not address McEvoy’s argument that our prec-
        edent conflicts with the Supreme Court in Krupski v. Costa Crociere S.p.A.,
        560 U.S. 538, 553 (2010). We leave that for another day.
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        10                     Opinion of the Court                 22-12081

                No party disputes the district court’s determination that
        McEvoy’s claims arose no later than June 11, 2013—the date the
        2013 LTIP became effective. Under Delaware law, the statute of
        limitations for claims for breach of fiduciary duty is three years.
        Del. Code Ann. tit. 10 § 8106. Thus, McEvoy had until June 11,
        2016 to file his claim. McEvoy filed his original complaint on Au-
        gust 3, 2017—over one year past the statute of limitations. For
        McEvoy’s original complaint to be timely, he must have showed
        that the claim was tolled from June 11, 2013 to at least August 3,
        2014. But whether or not any tolling doctrine applies to McEvoy’s
        claims, “the limitations periods is tolled [only] until such time that
        persons of ordinary intelligence and prudence would have facts suf-
        ficient to put them on inquiry which, if pursued, would lead to the
        discovery of the injury.” In re Dean Witter P’ship Litig., No. CIV.
        A. 14816, 1998 WL 442456, at *7 (Del. Ch. July 17, 1998), aff’d, 725
        A.2d 441 (Del. 1999) (emphasis omitted).
                A review of the record shows that McEvoy received enough
        information to put him on inquiry notice. First, in December 2012,
        CEVA Logistics informed McEvoy that he would be laid off in
        March 2013. On January 21, 2013, McEvoy exercised his right to
        sell his 2006 LTIP shares and received notice the next day that
        CEVA would purchase those shares back on April 1, 2013. McEvoy
        also learned the value for each share was around €50. Then on
        April 5, 2013, McEvoy received a letter discussing CEVA Group’s
        restructuring, explaining that his shares had no value, and stating
        he would not receive any recovery due to his shareholding in CIL.
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        22-12081               Opinion of the Court                       11

        In addition, McEvoy received letters about the Cayman Island liti-
        gation and the Bankruptcy proceedings concerning CIL. As the dis-
        trict court stated:
              McEvoy should have been on inquiry notice in 2013
              when he was suddenly informed that his shares,
              which had been worth €50 each, were now worth €0.
              McEvoy had the 2006 LTIP Agreement in his posses-
              sion, which he alleges mandated adjustments to his
              investment. McEvoy could see that CEVA continued
              to operate after he was let go, and that it was perhaps
              expanding, even hiring him temporarily to start up a
              new contract.

        McEvoy v. Apollo Glob. Mgmt., LLC, No. 3:17-CV-891-TJC-MCR,
        2022 WL 718393, at *7 (M.D. Fla. Mar. 10, 2022).
               Thus, we find that Appellees met their burden “to point to
        undisputed facts in the record which demonstrate conclusively that
        [McEvoy] had notice of [his] claims, and, that, had [he] exercised
        reasonable diligence, [he] would have discovered adequate
        grounds for filing [his] lawsuit during the limitations period.” Mor-
        ton’s Mkt., Inc. v. Gustafson’s Dairy, Inc., 198 F.3d 823, 832 (11th
        Cir. 1999), amended in part, 211 F.3d 1224 (11th Cir. 2000)
                                       III.
               For the reasons stated above, we affirm both the district
        court’s denial of discovery and the district court’s summary judg-
        ment in favor of Appellees.
              AFFIRMED.