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IN THE SUPREME COURT OF FLORIDA

CBS RADIO STATIONS INC. f/k/a INFINITY RADIO INC.,

Appellant/Petitioner, Case Nos. SC10-2189, SC10-2191 (consolidated) v. L.T. Case No. 4D08-3504 ELENA WHITBY a/k/a JENNIFER ROSS, JAMES CRYSTAL LICENSES, LLC, JAMES CRYSTAL HOLDINGS, INC., and JAMES CRYSTAL ENTERPRISES, LLC,

Appellees/Respondents. ______/

———————————————————————————————— APPELLANT/PETITIONER’S BRIEF ON JURISDICTION ————————————————————————————————

MATTHEW J. CONIGLIARO ALAN ROSENTHAL Florida Bar No. 63525 Florida Bar No. 220833 CARLTON FIELDS, P.A. NATALIE J. CARLOS 200 Central Avenue, Suite 2300 Florida Bar No. 0146269 St. Petersburg, Florida 33701 CARLTON FIELDS, P.A. Telephone: 727-821-7000 100 S.E. Second Street, Suite 4200 Facsimile: 727-822-3768 , Florida 33131-2114 Telephone: 305-530-0050 Facsimile: 305-530-0055

Attorneys for Appellant/Petitioner CBS Radio Stations Inc.

TABLE OF CONTENTS

TABLE OF CITATIONS ...... ii

INTRODUCTION ...... 1

STATEMENT OF CASE AND FACTS ...... 1

SUMMARY OF ARGUMENT ...... 5

ARGUMENT ...... 6

I. THE COURT HAS MANDATORY APPELLATE JURISDICTION BECAUSE THE DISTRICT COURT HELD A STATUTE INVALID. . 6

II. THE COURT HAS DISCRETIONARY JURISDICTION TO REVIEW THE FOURTH DISTRICT’S DECISION AND SHOULD EXERCISE THAT DISCRETION TO CONSIDER FLORIDA’S INTERESTS IN PROTECTING COVENANTS NOT TO COMPETE...... 7

A. THE DECISION EXPRESSLY CONSTRUED THE FEDERAL CONSTITUTION’S DUE PROCESS PROVISION...... 7

B. THE DECISION CREATES CONFLICT REGARDING THE IMPOSITION OF NOMINAL DAMAGES...... 8

C. THE COURT SHOULD EXERCISE ITS DISCRETION IN THIS IMPORTANT NON-COMPETE CASE...... 9

CONCLUSION ...... 10

CERTIFICATE OF SERVICE ...... 12

CERTIFICATE OF COMPLIANCE ...... 12

i TABLE OF CITATIONS

CASES

Beverage Canners, Inc. v. Cott Corp, 372 So. 2d 954 (Fla. 3d DCA 1979) ...... 8

Cason v. Baskin, 159 Fla. 31, 30 So. 2d 635 (1947) ...... 8-9

Exxon Shipping Co. v. Baker, 554 U.S. 471 (2008) ...... 10

Imperial Majesty Cruise Line, LLC v. Weitnauer Duty Free, Inc., 987 So. 2d 706 (Fla. 4th DCA 2008), rev. denied, 7 So. 3d 536 (Fla. 2009) ..... 9

James Crystal Licenses, LLC v. Infinity Radio Inc., 43 So. 3d 68 (Fla. 4th DCA 2010) ...... 1

State v. Robinson, 873 So. 2d 1205 (Fla. 2004) ...... 6

Whitby v. Infinity Radio Inc., 951 So. 2d 890 (Fla. 4th DCA 2007) ...... 2-3

Young v. Johnston, 475 So. 2d 1309 (Fla. 1st DCA 1985) ...... 8

STATUTES

Florida Statute Section 542.335 ...... 1

Florida Statute Section 542.335(l)(j) ...... 9

Florida Statute Section 542.335(l)(k) ...... 9

Florida Statute Section 768.73(1)(c) ...... 4-6

ii MISCELLANEOUS

Art. V, § 3(b)(1), Florida Constitution ...... 6

Art. V, § 3(b)(3)-(4), Florida Constitution ...... 7

iii INTRODUCTION

CBS Radio Stations Inc., f/k/a Infinity Radio Inc. (“CBS”), appeals from and seeks review of James Crystal Licenses, LLC v. Infinity Radio Inc., 43 So. 3d 68

(Fla. 4th DCA 2010). That decision vacated jury awards of compensatory and punitive damages against a former CBS employee who breached a non-compete agreement and against CBS’s competitors who intentionally procured that breach.

The district court refused to permit nominal damages against any defendant and, as a matter of federal due process, prohibited punitive damages awards against business competitors who cause merely economic damages. The court remanded for entry of judgment in the defendants’ favor, despite their proven wrongdoing.

Pursuant to this Court’s November 23, 2010 consolidation order, this brief will demonstrate the Court’s mandatory and discretionary jurisdiction to review the decision below. CBS will also demonstrate that the district court’s decision creates bad law for Florida and all who protect their business interests through non- compete agreements enforceable under section 542.335, Florida Statutes. In particular, CBS will show that the decision below effectively guts Florida’s non- compete statute by precluding nominal damages, precluding punitive damages in economic injury cases, and potentially awarding fees and costs to wrongdoers.

STATEMENT OF CASE AND FACTS

Through its predecessor in interest, CBS employed Appellee/Respondent

1 Elena Whitby as an on-air radio personality at WEAT-FM. A1. Whitby entered an agreement that prohibited her from discussing with third parties any agreement concerning her services and from competing with WEAT within one year of leaving her employment. A1-2. Despite these clear contractually bargained-for restrictions, Whitby nonetheless negotiated with a competitor while employed at

WEAT, joined the competitor, and immediately began on-air broadcasts. A2.

CBS sued Whitby for breach of contract, seeking damages and injunctive relief. A2-3. CBS also sued Appellees/Respondents James Crystal Licenses, LLC;

James Crystal Holdings, Inc.; and James Crystal Enterprises, LLC, for tortious

interference in inducing Whitby’s breach of contract. Id.

CBS prevailed in the first trial, obtaining injunctive relief against Whitby and James Crystal Licenses, $2.3 million in compensatory damages, and a $13.2 million punitive damages award against James Crystal Holdings. A2. The Fourth

District reversed the judgment, holding that issues existed regarding the non- compete agreement’s reasonableness and that, while CBS presented competent substantial evidence regarding $400,000-$600,000 in advertising losses, its evidence on general lost profits was speculative. Whitby v. Infinity Radio Inc., 951

So. 2d 890, 897-900 (Fla. 4th DCA 2007) (“Whitby I”).

On remand, the trial court upheld the non-compete agreement, finding the

covenant enforceable within a 100-mile radius. A2 n.5. The parties then retried

2 the case, with CBS focusing its damages evidence on lost revenues from seven specific advertising accounts. A3-4. The jury awarded CBS $126,511.48 in lost advertising profits against all defendants and $2.3 million in punitive damages against each of the James Crystal defendants. A4. The jury found that the corporate defendants had a specific intent to harm when they tortiously interfered with Whitby’s non-compete agreement. A13 n.9.

On appeal, and despite Whitby I’s holding that CBS previously presented competent substantial evidence of lost advertising damages, the district court held that CBS’s lost advertising evidence did not account for “external variables” and so failed to establish damages as a matter of law. A5. The district court reversed

the compensatory damages award without any acknowledgement that CBS should

be, at a minimum, entitled to nominal damages.

The court further held that, absent compensatory damages, “the punitive

damages must also fall.” A8. In its analysis, the district court examined the

punitive damages award for excessiveness under the federal Due Process Clause.

A9. Rather than determine that the award was excessive in some amount, the court

concluded that punitive damages could not be awarded at all in a non-compete case involving economic injuries among business competitors because they lack

“the level of reprehensibility required for a punitive damage award.” A12.

More specifically, the court held that, to satisfy the federal reprehensibility

3 analysis, misconduct must be “gravely deplorable, deserving of severe condemnation at issue, even threatening basic interests of an individual beyond purely economic loss.” A11 (emphasis added) (quotation omitted). Applying that standard, the court found that the corporate defendants’ conduct here was

“economic; not physical,” “did not evince an indifference or reckless disregard of health or safety,” and was “not gravely deplorable, odious, wicked or outrageous.”

Id. The court viewed this case as based merely on an “isolated incident involving

Whitby’s violation of a non-compete provision.” Id. In concluding that the

defendants’ conduct “failed the test of reprehensibility,” the court discounted the

seriousness of competitors procuring breaches of non-compete agreements,

declaring, “[W]e diminish the nature of the harm in this case.” A11, A13. The

district court briefly examined the proportionality and comparable civil penalty

prongs of the due process analysis, holding the total punitive damages awards

disproportionate and that no comparable civil penalty existed. A12-13.

The district court further stated it was not “overlook[ing]” section

768.73(1)(c), Fla. Stat., which provides that punitive damages shall be imposed

without caps where a jury finds that a defendant acted with a specific intent to

harm. A13 n.9. The jury found such wrongful intent here, but the court refused to

apply the statute and instead relied on the Due Process Clause, holding,

“Nevertheless, the ultimate decisive factor is the Constitution.” Id.

4 The district court reversed the judgment and remanded the case “for entry of a judgment in favor of the defendants.” A14. The court so held despite the fact

CBS prevailed on its injunction, breach of contract, and tortious interference claims in all respects except for proving the amount of compensatory damages.

SUMMARY OF ARGUMENT

The Court has mandatory jurisdiction based on the district court’s express holding that it was applying the federal Due Process Clause, and not section

768.73(1)(c), because the federal constitution controls. Declaring a state statute invalid as applied in a particular case gives rise to mandatory appellate jurisdiction.

The Court has discretionary jurisdiction because the district court expressly construed the federal constitution’s Due Process Clause. The Court also has discretionary jurisdiction because the district court’s reversal and remand for judgment in favor of the defendants conflicts with decisions requiring nominal damages under the circumstances here or remanding for their imposition.

By directing entry of judgment for the defendants, the decision below tells employers that if they cannot quantify their economic damages then they will be faced with paying a proven wrongdoer’s fees and costs. The decision also holds that due process prohibits punitive damages for intentional interference with a non- compete agreement causing only economic damages. These erroneous holdings undermine Florida’s non-compete statute. The decision should be reviewed.

5 ARGUMENT

I. THE COURT HAS MANDATORY APPELLATE JURISDICTION BECAUSE THE DISTRICT COURT HELD A STATUTE INVALID.

The Court has mandatory appellate jurisdiction to review district court decisions that declare a state statute invalid. Art. V, § 3(b)(1), Fla. Const. Such jurisdiction exists whether a district court holds a statute facially invalid or unconstitutional as applied. State v. Robinson, 873 So. 2d 1205, 1207 (Fla. 2004).

“Where the fact finder determines that at the time of injury the defendant had a specific intent to harm the claimant and determines that the defendant’s conduct did in fact harm the claimant, there shall be no cap on punitive damages.” § 768.73(1)(c), Fla. Stat. (1999) (emphasis added). The jury made those findings, but the district court refused to apply the statute and instead held that, under the Due Process Clause, punitive damages cannot be awarded for intentional interference with a competitor’s non-compete agreement. A13 n.9.

CBS does not contest that the Due Process Clause is the law of the land and controls an excessiveness inquiry. That provision does not, however, prohibit punitive damages where a person intends to harm a competitor by economically interfering with a non-compete agreement. Because the district court expressly held section 768.73(1)(c) invalid as applied to a jury’s punitive damages award for economic harm from intentional interference with a non-compete agreement, A13 n.9, the Court has mandatory appellate jurisdiction and must hear CBS’s appeal.

6 II. THE COURT HAS DISCRETIONARY JURISDICTION TO REVIEW THE FOURTH DISTRICT’S DECISION AND SHOULD EXERCISE THAT DISCRETION TO CONSIDER FLORIDA’S INTERESTS IN PROTECTING COVENANTS NOT TO COMPETE.

The Court has discretionary jurisdiction to review decisions of district courts

that expressly construe a provision of the federal constitution or expressly and

directly conflict with a decision of this Court or another district court. Art. V,

§ 3(b)(3)-(4), Fla. Const. Here, discretionary jurisdiction exists in both respects.

A. THE DECISION EXPRESSLY CONSTRUED THE FEDERAL CONSTITUTION’S DUE PROCESS PROVISION.

In reaching its holding that the “the punitive damage award runs afoul of the

Due Process Clause of the United States Constitution,” A10, the district court

expressly construed that federal constitutional provision in numerous respects. Id.

at 77-80. For instance, the court held that, under the provision’s reprehensibility

prong, it is “mandatory” that conduct warranting punitive damages be “gravely

deplorable, deserving of severe condemnation at issue, even threatening basic

interests of an individual beyond purely economic loss.” A11 (emphasis added).

The district court elaborated on due process and ultimately interpreted the

Due Process Clause to preclude punitive damages where someone induces a

competitor’s employee to violate a non-compete agreement, resulting in only

economic loss—even if the person intended to harm the plaintiff. The district

court thus expressly construed the federal constitution.

7 B. THE DECISION CREATES CONFLICT REGARDING THE IMPOSITION OF NOMINAL DAMAGES.

Having found insufficient proofs to demonstrate compensatory or punitive damages, the district court reversed CBS’s judgment and remanded for entry of a judgment in favor of the defendants. The court did so without permitting CBS nominal damages for Whitby’s proven breach of contract or the James Crystal defendants’ proven intentional interference, despite the undisturbed jury findings establishing the wrongdoing on those claims. Doing so created conflict.

This Court long ago held, “Where nominal damages go to establish some

question of permanent right, or entitle plaintiff to costs, a trial may be

awarded for an erroneous failure to give nominal damages.” Cason v. Baskin, 159

Fla. 31, 40-41, 30 So. 2d 635, 640 (1947). Cason reversed a judgment precisely

for a lack of economic damages and, critically, ordered a new trial on nominal

damages. The First District subsequently held that “[n]ominal damages may be

awarded when the breach of an agreement or invasion of a right is established,

since the law infers some damage to the injured party; where there is insufficient

evidence presented to ascertain the particular amount of loss, the award of nominal damages is proper.” Beverage Canners, Inc. v. Cott Corp., 372 So. 2d 954, 956

(Fla. 3d DCA 1979) (emphasis added). The First District also held, “An aggrieved party who has suffered no damages is entitled to a judgment for nominal damages only . . . .” Young v. Johnston, 475 So. 2d 1309, 1313 (Fla. 1st DCA 1985).

8 Express and direct conflict exists with all three cases. Under them, nominal damages should be available to CBS, which proved defendants’ wrongdoing but, in the district court’s view, failed to quantify its economic losses. As in Cason, nominal damages would both go to establishing a permanent right—consistent with the injunction CBS obtained—and would entitle CBS to costs. Instead, consistent with its prior decision in Imperial Majesty Cruise Line, LLC v.

Weitnauer Duty Free, Inc., 987 So. 2d 706 (Fla. 4th DCA 2008), rev. denied, 7 So.

3d 536 (Fla. 2009), which did not involve a non-compete agreement, the district court ordered judgment entered against CBS. CBS must now defend the defendants’ motions for costs and for fees under section 542.335(1)(k).

C. THE COURT SHOULD EXERCISE ITS DISCRETION IN THIS IMPORTANT NON-COMPETE CASE.

The decision below takes a proven breach of a non-compete agreement and proven intentional interference in procuring that breach and holds that, because

CBS could not quantify its damages, the defendants are entitled to judgment. This

invites claims for fees and costs, see § 542.335(1)(k), and does great violence to

the enforceability of non-compete agreements, which section 542.335(1)(j)

expressly makes enforceable “by any appropriate and enforceable remedy.”

Nominal damages would permit a plaintiff to prevail and are certainly an

“appropriate and enforceable remedy” against those who breach non-compete

agreements and those who procure such breaches through intentional interference.

9 It is well recognized that nominal damages may support punitive damages in tort cases. See, e.g., Exxon Shipping Co. v. Baker, 554 U.S. 471, 494 (2008) (quoting

Restatement (2d) of Torts § 908, cmt. c (“Thus an award of nominal damages . . . is enough to support a further award of punitive damages, when a tort . . . is committed for an outrageous purpose, but no significant harm has resulted”)).

The decision below also does great violence to the federal constitution by holding that intentional interference with a competitor’s non-compete agreement produces merely economic harm and so “[does] not reach the level of reprehensibility required for a punitive damage award.” A12. This forecloses employers from seeking punitive damages, and grants wrongdoers immunity from them, where a breach is intentionally induced but causes only economic harm.

The decision below will not just affect future litigation. It will prevent litigation in the first place by discouraging employers who have been wronged from enforcing their rights and pursuing their wrongdoers, for fear of being held not to have properly quantified their damages and having fees and costs imposed in the wrongdoers’ favor. That decision is irreconcilable with the statutory protection afforded non-compete agreements and is unjust not only here but as a matter of public policy going forward. The time to correct this problem is now.

CONCLUSION

The Court should accept jurisdiction and review the decision below.

10 Respectfully submitted,

/s/ Matthew J. Conigliaro______MATTHEW J. CONIGLIARO Florida Bar No. 63525 CARLTON FIELDS, P.A. 200 Central Avenue, Suite 2300 St. Petersburg, Florida 33701 Telephone: 727-821-7000 Facsimile: 727-822-3768

ALAN ROSENTHAL Florida Bar No. 220833 NATALIE J. CARLOS Florida Bar No. 0146269 CARLTON FIELDS, P.A. Suite 4200 Miami Tower 100 S.E. Second Street Miami, Florida 33131-2114 Telephone: 305-530-0050 Facsimile: 305-530-0055

Attorneys for Appellant/Petitioner CBS Radio Stations Inc.

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CERTIFICATE OF SERVICE

I CERTIFY that on January 20, 2011, a true copy of the foregoing was served by U.S. mail on:

Robert G. Haile, Esquire David L. Gorman, Esquire Haile, Shaw & Pfaffenberger, P.A. David L. Gorman, P.A. Third Floor Suite 303 660 U.S. Highway One 618 U.S. Highway One North Palm Beach, Florida 33408 North Palm Beach, Florida 33408

/s/ Matthew J. Conigliaro______MATTHEW J. CONIGLIARO Florida Bar No. 63525

CERTIFICATE OF COMPLIANCE WITH RULE 9.210(a)(2)

I HEREBY FURTHER CERTIFY that the type size and style used throughout this brief is 14-point Times New Roman double-spaced, and that this brief fully complies with the requirements of Florida Rule of Appellate Procedure

9.210(a)(2).

/s/ Matthew J. Conigliaro______MATTHEW J. CONIGLIARO Florida Bar No. 63525

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