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The 11th U.S. Circuit Court of Appeals has issued an opinion that could be used to limit forum shopping. A three-judge panel last week let stand a judge’s unusual order allowing plaintiffs to dismiss a case against Home Depot on two conditions: If they refile their claims, they must do so in Atlanta and pay the company’s legal costs from defending the first action. The conditions in the order by Senior Judge Marvin H. Shoob “protect the defendant from unfairness and do not constitute legal prejudice to the plaintiff,” read the decision by the panel — 11th Circuit Judges Gerald B. Tjoflat, Stanley Marcus and William H. Pryor Jr. Two appellate and federal court experts not involved with the case found the 11th Circuit’s ruling noteworthy — but for different reasons. Laurie Webb Daniel, who heads Holland & Knight’s appellate group and typically represents corporate defendants, was intrigued that the panel issued its decision in a “published,” or precedential, manner. Decisions on procedural matters such as permission to dismiss a case are usually handled in non-precedential orders, she wrote in an e-mail exchange with the Daily Report. By publishing their decision, Daniel added, the judges sent a clear message that “reflects the Court’s decision to establish binding precedent that can be used to limit forum shopping.” A. Lee Parks Jr., who often represents plaintiffs in federal court, wrote in an e-mail that the decision was “an accurate statement of current law” but nonetheless “lamentable.” “Conditioning the refiling of what, at this juncture, must be presumed to be a valid claim against a mega corporation on the payment of the defendant’s attorneys’ fees is an effective judicial roadblock to the continuation of the litigation,” wrote Parks, a principal in Parks, Chesin & Walbert. “The correct result would be to warn the plaintiff of potential fee liability, but leave final resolution of the fee question until the end of the case,” Parks added. “That avoids the clear appearance that this case has been prejudged and found lacking.” PLAINTIFF: DEAL WENT BAD The case at hand was brought by two companies that produce and sell ladders, Versa Products Inc. of Wisconsin and G&L Products Inc. of Iowa. Both are owned principally by David Lambert Sr., David Lambert Jr. and Richard Lambert. Their lawyer, Louis J. Basso of Chesterfield, Mo.’s Basso & Myers, said Home Depot drove the companies out of business by promising to buy millions of dollars worth of ladders only to switch to a Chinese supplier nine months later. By that time, Basso said, his clients had spent vast sums to expand their production capacities at the direction of Home Depot. “Home Depot destroyed this guy’s business,” said Basso, referring to Richard Lambert Sr. Basso added that the companies lost value of about $6 million and eventually were sold to another company for “pennies on the dollar.” WHERE TO FILE Basso said he filed the suit in a St. Louis circuit court because that was where most of the key witnesses regarding the value of the companies were located. Home Depot’s lawyer in the case, King & Spalding’s Dwight J. Davis, referred a reporter’s call to his client. A call to the company’s media relations team was not returned. But according to court pleadings, Home Depot denied the ladder companies’ charges of fraud, deceptive trade practices and other wrongs. Home Depot first moved to have the case transferred to federal court in St. Louis, and upon that move, the company moved to transfer the case to Atlanta federal court to make it more convenient for company officials to testify. Basso said he objected to the transfer but could not appeal the order until the end of the case — a time that he said may never occur. Basso said his cash-strapped client could not afford to bring 15 witnesses from Missouri to Georgia, and so moved to dismiss the case. “It’s not a matter of forum shopping,” he said, noting he had not decided where, or whether, he would refile the matter. Basso added that he planned to ask the U.S. Supreme Court to review the case because the 11th Circuit “oversimplified the issue.” The case is Versa Products Inc. v. Home Depot USA Inc., No. 04-13654 (11th Cir. Oct. 18, 2004).

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