[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 02-13676 MAY 07, 2003
Non-Argument Calendar THOMAS K. KAHN
________________________ CLERK
D.C. Docket No. 00-03359-CV-DMM
GUYANA TELEPHONE & TELEGRAPH CO., LTD.,
a Guyanese Corporation,
Plaintiff-Appellant,
versus
MELBOURNE INTERNATIONAL COMMUNICATIONS, LTD.,
a Florida Limited Partnership,
WAJAY INVESTMENTS, INC.,
a Florida Corporation,
NACS COMMUNICATIONS, INC.,
a Florida Corporation,
CHILESAT, S.A.,
a Chilean Corporation
Defendants-Appellees,
__________________________
Appeal from the United States District Court for the
Southern District of Florida
_________________________
(May 7, 2003)
Before BLACK, MARCUS and KRAVITCH, Circuit Judges.
KRAVITCH, Circuit Judge:
Plaintiff-appellant Guyana Telephone and Telegraph Company (“GT&T”)
appeals the district court’s dismissal of its claims under the Florida Deceptive and
Unfair Trade Practices Act. It also appeals the district court’s denial of its Rule 50(b)
motion for judgment as a matter of law on the amounts of (1) compensatory damages
and (2) its restitution claim.
I. BACKGROUND
GT&T is a Guyanese corporation with a monopoly over the local phone
network in the Republic of Guyana. In 1993, GT&T entered into agreements with
AT&T and MCI to provide international-long-distance service between the United
States and Guyana. At all relevant times, AT&T and MCI were the only two
companies that could transfer U.S. calls to Guyana. Under separate agreements to
provide long-distance service from the United States to Guyana, MCI and AT&T
agreed to pay GT&T $0.85 per minute for calls to Guyana that had originated in the
United States.1 These $0.85-per-minute charges are called “termination payments.”
1
As described below, this case deals specifically with GT&T’s contract with MCI. The
contract between GT&T and AT&T is only relevant in helping to establish the market price for calls
from the United States to Guyana.
2
Sometime before 1996, the year when the causative events occurred, GT&T
began encouraging “audiotext” providers to route their phone traffic though Guyana.
Audiotext providers are generally telephone companies that handle phone traffic with
content “of an adult nature.” Often these audiotext calls would originate in the
United States, be sent to Guyana, and then be sent back to U.S. consumers. This
practice allowed GT&T to collect the $0.85-per-minute termination payment from
MCI. The benefit for the audiotext companies was that, in exchange for routing
phone traffic through Guyana, GT&T would pay them a percentage of the MCI
termination payment. Depending on the contract terms with each audiotext company,
GT&T would kick back between $0.40 and $0.525 per minute for audiotext calls. In
1996, audiotext calls produced approximately seventy-five percent of GT&T’s
revenue from U.S. termination payments.
GT&T’s claims arose from a scheme that deprived GT&T of termination fees
that it would have received from MCI. GT&T alleged that the scheme involved four
defendants: (1) Melbourne, a Florida communications company that obtained calls
from various U.S. carriers for delivery to a number of places in the Western
hemisphere; (2) Wajay, Melbourne’s general partner; (3) NACS, Melbourne’s limited
partner; and (4) Chilesat, a provider of international-long-distance service for calls
originating in Chile.
3
Under the defendants’ plan, Melbourne solicited other U.S. communications
carriers by offering low rates for calls to Guyana and then entered into agreements
with these companies. In August and September of 1996, Melbourne received and
aggregated these Guyana-bound calls at its facility in Florida and then used telephone
circuits owned by Chilesat to transfer the calls from Florida to MCI’s international
switching center in New Jersey. This scheme made it appear as if the calls had
originated in Chile rather than in the U.S.; thus, the contract between MCI and GT&T
did not seem to apply.
MCI normally would have refused to send Chilesat’s calls to Guyana unless
Chilesat had paid termination payments to MCI for the benefit of GT&T. Chilesat
circumvented this problem by misrepresenting to MCI that it had a “direct
accounting” relationship with GT&T. As a result, MCI did not collect termination
charges from Chilesat because it believed that Chilesat was paying termination
charges directly to GT&T. Therefore, because MCI believed these calls originated
in Chile and because Chilesat dishonestly convinced MCI that it was paying GT&T’s
termination charges, MCI sent over one million minutes of U.S.-originated calls to
Guyana without obtaining payment for GT&T.2 If GT&T had received $0.85 per
2
There was evidence supporting three possible calculations of the number of minutes that
MCI routed to Guyana without paying termination charges: 1,169,166; 1,238,377; and 1,298,000.
4
minute for all of these calls, it would have received almost $1 million in termination
charges from MCI.
GT&T brought its claims under civil RICO, unjust enrichment,3 tortious
interference with contract, civil conspiracy, and the Florida Deceptive and Unfair
Trade Practices Act (“FDUTPA” or the “Act”). It also sought punitive damages. The
court entered a default judgment on liability as to all claims against Chilesat, except
for the FDUTPA claim. The court dismissed the FDUTPA claims as to all defendants
when it granted the defendants’ Rule 50 motion at the close of evidence, reasoning
that the FDUTPA claims were improper because GT&T was not a “consumer” under
the meaning of the Act. On the claims that were permitted to proceed, the jury found
Melbourne and Wajay liable for unjust enrichment and civil conspiracy.
3
GT&T asserts that its right to restitution arises from an unjust enrichment. This is not quite
accurate. The fact that it would be “unjust” (as in “unfair”) for a defendant to retain a benefit
obtained through the commission of wrong does not mean that the basis of the restitutionary
obligation arises from an unjust enrichment. “Liability in unjust enrichment has in principle nothing
to do with fault. It has to do with wealth being in one person’s hands when it should be in another
person’s.” Peter Birks, Unjust Enrichment and Wrongful Enrichment, 79 Texas L. Rev. 1767, 1789
(2001). The paradigm examples of unjust enrichment are mistaken transfers. “As soon as [a]
claimant relies on a wrong [to supply the unjust factor], the right on which he relies arises from that
wrong, not from unjust enrichment.” Id. at 1783. Here, because GT&T’s right to restitution arises
from the wrong of the tort committed by the conspiracy, this is a case of wrongful enrichment rather
than unjust enrichment: the breach of a primary tort duty gave rise to a secondary right to restitution
for the benefit obtained through commission of the wrong. We treat GT&T’s references to “unjust
enrichment” as requests for restitution, understanding that the defendants’ wrong is the basis for the
obligation.
5
As for damages, the jury found Melbourne liable for $263,155 plus
prejudgment interest on the unjust-enrichment claim. Notably, it used compensatory
damages (rather than restitution) as the measure of recovery. On the civil-conspiracy
claims, the jury awarded (1) compensatory damages of $263,155 plus prejudgment
interest and (2) $100,000 in punitive damages against both Melbourne and Wajay.
The court used the jury’s compensatory-damages calculation when it assessed the
default judgments against Chilesat. Pursuant to 28 U.S.C. § 1964(c), the court trebled
the compensatory damages against Chilesat on the civil RICO claim, for a total award
on this claim of $789,465 plus prejudgment interest. It also entered default judgment
against Chilesat in the amount of $263,155 plus prejudgment interest on the tortious-
interference claim. In addition, the jury leveled punitive damages of $726,310 against
Chilesat on the civil-conspiracy claim.
GT&T appeals three issues. First, GT&T contends that the district court erred
in granting the defendants’ Rule 50 motion to dismiss GT&T’s FDUTPA claims.
GT&T argues that it was a “consumer” under the meaning of FDUTPA as it stood in
1996 and, alternatively, that the district court should have applied the statute’s 2001
amendments retroactively. Second, GT&T maintains that the district court erred in
refusing to grant its Rule 50(b) motion for judgment as a matter of law on the amount
of its compensatory damages. GT&T contends that because the defendants deprived
6
it of at least 1,169,166 minutes of calls at $0.85 per minute, the evidence would have
compelled a reasonable jury to find damages of at least $993,791. Third, GT&T
argues that the district court erred when it refused to grant GT&T’s Rule 50 motion
challenging the jury’s calculation of the unjust-enrichment claim. GT&T argues that
the appropriate measure of recovery is the benefit conferred upon the defendants,
which was $993,791.
II. STANDARD OF REVIEW
An appellate court reviews de novo a district court’s ruling on a Rule 50
motion for judgment as a matter of law. Combs v. Plantation Patterns, 106 F.3d 1519,
1526 (11th Cir. 1997). GT&T seeks review of the district court’s decisions on two
Rule 50 motions. Accordingly, we review the entire appeal de novo.
III. ANALYSIS
A. Whether the District Court Erred in Dismissing GT&T’s Claim under
the FDUTPA
The district court dismissed GT&T’s FDUTPA claims, concluding that GT&T
could not avail itself of the statute because it was a supplier—rather than a
“consumer”—for the transactions in question. It also held that the FDUTPA’s 2001
7
amendments should not apply retroactively to this case. We agree with the district
court’s reasoning on both issues.
The transactions in question all occurred in 1996, so the 1993 amendments to
the FDUTPA apply to this case. The definition of “consumer” in the 1993 version
of the FDUTPA included not only individuals but also various business
organizations, including “corporations.” Fla. Stat. Ann. § 501.203(7) (West 1997).
In 1993, the Florida legislature amended the stated purposes and rules of construction
for the FDUTPA to provide as its central aim the protection of “the consuming public
at large and legitimate business enterprises from those who engage in unfair methods
of competition, or unconscionable, deceptive, or unfair acts or practices in the
conduct of any trade or commerce.” Id. § 501.22. Before 1993, the same provision
stated, “To protect consumers from suppliers who commit deceptive and unfair trade
practices.” Id. historical & statutory notes.
GT&T argues that the 1993 amendments demonstrated a shift in the FDUTPA
to afford protection not just to consumers but also to any legitimate business
enterprise that had been injured by an unfair or deceptive business practice.
Accordingly, GT&T argues that the fact that it was the supplier in this transaction
should not prevent its FDUTPA claims. At least one court has agreed with this
8
general argument. See Tampa Bay Storm, Inc. v. Arena Football League, Inc., 1998
WL 182418 (M.D. Fla. Mar. 19, 1998).
Here, in dismissing GT&T’s FDUTPA claims, the district court cited §
501.211(2) of the Act, which states, “In any individual action brought by a consumer
who has suffered a loss as a result of a violation of this part, such consumer may
recover actual damages.” The court reasoned that although the definition of
“consumer” may include corporations and other business associations, Florida courts
have “focused on the capacity in which a given entity was acting in determining
whether the entity qualified as a ‘consumer’ and as such could seek monetary
damages under the FDUTPA.” 4 The district court relied on Warren Technology, Inc.
v. Hines Interests Limited Partnership, 733 So. 2d 1146 (Fla. 3d Dist. Ct. App. 1999),
and N.G.L. Travel Associates v. Celebrity Cruises, Inc., 764 So. 2d 672 (Fla. 3d Dist.
Ct. App. 2000). Both of these cases instructed that corporations could not bring suit
under the 1993 version of the FDUTPA when they had acted as suppliers or
producers rather than as “consumers” for the transactions in question.
The district court was correct to dismiss the FDUTPA claims. As described
above, two decisions by Florida courts have addressed the FDUTPA’s application to
this very issue, and these decisions support the district court’s dismissal of the
4
Order on Defs.’ Rule 50 Mot. Concerning Pl.’s FDUTPA Claim, at 2.
9
FDUTPA claims. Furthermore, even though the 1993 amendments expanded the
law’s protection to both “the consuming public at large” and “legitimate business
enterprises,” the language of the statute still only permitted “consumers” to bring
actions seeking monetary relief.5 Fla. Stat. § 501.211(2) (West 1997).
According to GT&T’s alternative argument, the FDUTPA’s 2001 amendments
expanded the pool of possible plaintiffs to include nonconsumers. Even if this were
so, we cannot agree with GT&T’s contention that the 2001 amendments should apply
retroactively. “[I]n the absence of clear legislative intent to the contrary, a law
affecting substantive rights is presumed to apply prospectively.” Arrow Air, Inc. v.
Walsh, 645 So. 2d 422, 424 (Fla. 1992). Here, retroactive application would affect
substantive rights by creating rights where none existed before. Therefore, for GT&T
to prevail on its argument, the Florida legislature must have clearly intended
retroactive application. The Act’s text and the legislative history do not provide
evidence of clear legislative intent to apply the 2001 amendments retroactively.
Therefore, the district court did not err in dismissing GT&T’s claims under the
FDUTPA.
5
Unlike § 501.211(1), which permitted “anyone aggrieved by a violation” of the Act to bring
an action for a declaratory judgment that an act or practice violates the Act, claimants seeking actual
damages had to be “consumers.” See Fla. Stat. § 501.211(2) (West 1997).
10
B. Whether the District Court Erred in Upholding the Jury’s Calculation
of GT&T’s Compensatory Damages
In reviewing GT&T’s renewed motion for judgment as a matter of law on the
amount of compensatory damages, we must decide whether there was a “legally
sufficient evidentiary basis for a reasonable jury” to find that GT&T’s compensatory
damages were $263,155. Fed. R. Civ. P. 50(a). In reviewing the denial of the Rule
50 motion, “we consider all the evidence, and the inferences drawn therefrom, in the
light most favorable to the nonmoving party.” Carter v. City of Miami, 870 F.2d 578,
581 (11th Cir. 1989).
In reviewing the jury’s verdict, it is not our province to substitute our judgment
as to the correct measure of damages; instead, we must determine whether the jury’s
calculation was reasonable in light of the trial evidence. Evidence in the record
supports three possible calculations for the number of minutes that MCI routed to
Guyana without paying termination charges. One witness stated that the number of
minutes was 1,238,377. This calculation of minutes multiplied by the contract rate
of $0.85 per minute would have produced $1,052,620 in termination payments. The
jury, however, did not believe that GT&T carried its burden to prove all of its alleged
compensatory damages, as it awarded only $263,155.
11
If the jury assumed that the set of “stolen” minutes and the set of all 1996
minutes had roughly the same breakdown of audiotext versus non-audiotext minutes,
it reasonably could have concluded that GT&T proved its damages with respect to all
of the minutes for non-audiotext calls. Thus, because non-audiotext calls constituted
twenty-five percent of the minutes, there would have been approximately 309,594.25
non-audiotext minutes. When multiplied by the contract rate of $0.85 per minute,
there would be damages of $263,155 for the non-audiotext minutes. This number is,
probably not coincidentally, the exact amount of compensatory damages that the jury
awarded.
The next inquiry is whether a reasonable jury could have completely denied
recovery for the other seventy-five percent of the minutes. GT&T asserts that the
evidence would have compelled a reasonable jury to award it $0.85 for every minute
that the appellees “stole.” We disagree. The evidence shows that GT&T, following
industry custom, usually gave audiotext companies a large percentage of the
termination payments generated from audiotext calls. Failing to discount the likely
amount of the kickbacks to audiotext companies would ignore industry custom and
would place GT&T in a better position than it would have occupied but for the
defendants’ wrong. Accordingly, it was reasonable for the jury to reduce GT&T’s
12
damages award by the amount of money that GT&T would have “kicked back” to
audiotext companies.
Nevertheless, it was not reasonable for the jury to find that GT&T suffered zero
damages with respect to the audiotext calls. Even though determining the amount
paid in kickbacks is difficult, the trial evidence gives varying rates for the amount of
the kickbacks, ranging from $0.40 per minute to $0.525 per minute. Unfortunately,
neither side provided the jury with a weighted average for the discount rate.
Therefore, because tort law requires an aggrieved plaintiff to prove its damages with
a reasonable degree of certainty, see Central State Transit & Leasing Corp. v. Jones
Boat Yard, Inc., 206 F.3d 1373, 1376S77 (11th Cir. 2000), we will assume the highest
discount rate, $0.525 per minute. Using this figure, the minimum amount of damages
that a reasonable jury could have found was $533,462. We arrive at this figure by
adding the amount that GT&T would have earned from non-audiotext calls
($248,447.786) and the amount that it would have earned from audiotext calls
($284,984.227). Accordingly, even though GT&T forwarded an incorrect calculation
6
This amount is the product of 1,169,166 minutes (the minimum number of “stolen”
minutes) times 0.25 (the percent of “stolen” minutes attributed to non-audiotext calls) times $0.85
per minute (the per-minute rate under the MCI contract with GT&T).
7
This amount is the product of 1,169,166 minutes (the minimum number of “stolen”
minutes) times 0.75 (the percent of “stolen” minutes attributed to audiotext calls) times $0.325 per
minute (the discounted per-minute rate, which is the difference between the contract rate of $0.85
per minute and the kickback rate of $0.525 per minute).
13
of its losses, the district court erred in denying GT&T’s Rule 50 motion as to the
measure of its damages because the jury’s calculation of damages was unreasonable.
C. Whether the District Court Erred in Upholding the Jury’s Calculation
of GT&T’s Right to Restitution
In most cases there would be no need to assess the availability and the measure
of a restitutionary remedy, as the amount of the plaintiff’s loss usually equals the
measure of the defendant’s gain. But, here, GT&T paid kickbacks to audiotext
companies, which practice would have reduced the amount that the defendants would
need to pay in compensation to return GT&T to its rightful position. Accordingly,
we must address GT&T’s restitution claim because GT&T’s loss was less than the
defendants’ gain.
Restitution is a remedy that is often available to victims of a wrong.
Restitution measures a plaintiff’s recovery according to the defendant’s, rather than
the plaintiff’s, rightful position. Because the jury measured GT&T’s right to
restitution in terms of GT&T’s loss rather than by the benefit conferred on the
defendants, the district court erred when it failed to grant GT&T’s Rule 50 motion.
In cases of wrongful enrichment, a plaintiff whose goods or services were obtained
by a conscious wrongdoer generally has two available remedies: compensatory
damages or restitution. When the plaintiff elects restitution, the plaintiff can either
14
recover the goods themselves or the fair market value of the transferred goods and
services. See Barbouti v. Lysandrou, 559 So. 2d 648, 650S51 (Fla. Dist. Ct. App.
1990) (noting that a defendant’s tortiously taking of money or goods belonging to
another gives rise to an implied obligation to return that property and that a plaintiff
may “‘waive’ the tort action, and sue instead on a theoretical and fictitious contract
of restitution of the benefits which the defendant has so received”) (citing W. Prosser
& W. Keeton, The Law of Torts § 94, at 672S73). Furthermore, if the goods have
been sold by the tortfeasor, the plaintiff may recover either the fair market value of
the goods and services (restitutionary remedy) or the proceeds of the sale
(disgorgement remedy), and the plaintiff is entitled to the higher.8 1 George E.
Palmer, The Law of Restitution § 2.12, at 157S58 (1978).
Applying these principles to the present case, the defendants were conscious
wrongdoers who conspired to use GT&T’s phone networks for calls from the United
States to Guyana. The fair market value of these goods and services, as measured by
GT&T’s contracts with MCI, was $0.85 per minute. The evidence shows that the
defendants wrongfully appropriated (and GT&T unknowingly conferred on the
8
As just stated, the law appears to allow the plaintiff in cases such as this to choose not only
between loss-based and gain-based awards but also, within the gain-based category, between the
higher of the restitutionary award and the disgorgement award. In our analysis, we have not used
the language of legal fictions—such as “contracts implied in law” and “waiving the tort”—that
sometimes appears in judicial opinions. Instead, we have focused on determining what remedies are
available to plaintiffs whose entitlements have been taken by conscious wrongdoers.
15
defendants) at least 1,169,166 minutes. Therefore, a reasonable jury would have
measured GT&T’s right to restitution as at least $993,791.
On remand, GT&T may seek restitution from Melbourne, Wajay, and Chilesat,
as these three parties obtained a benefit from GT&T through wrongful conduct.
Nevertheless, GT&T cannot seek both damages and restitution from the defendants,
as doing so would violate the prohibition against receiving double recovery for the
same wrong. See Thornber v. City of Fort Walton Beach, 568 So. 2d 914, 919 n.8
(Fla. 1990); Barbe v. Villeneuve, 505 So. 2d 1331, 1332 (Fla. 1987).
IV. CONCLUSION
For the reasons stated, we AFFIRM the district court’s dismissal of GT&T’s
FDUTPA claims, but we REVERSE the denial of GT&T’s Rule 50(b) motion
concerning the measure of recovery. We REMAND this case to the district court for
further proceedings consistent with this opinion.
Affirmed in part, reversed in part, and remanded.
16