Summary
This Eleventh Circuit opinion addresses whether former Interface, Inc. CEO Jay Gould forfeited a new contractual interpretation theory on appeal by failing to raise it in the district court. Distinguishing between forfeitable "issues" and non-forfeitable "arguments," the court held that Gould's contention that the employment agreement granted the company no discretion to determine "cause" for termination constituted a new position rather than a subsidiary argument. Consequently, the court affirmed the district court's grant of summary judgment in favor of Interface, Inc.
Topics
Practice areas
Questions Presented
- Whether Gould's argument that Interface had no discretion to determine whether cause existed was a forfeitable issue or merely a non-forfeitable subsidiary argument.
- Whether Gould's forfeited no-discretion theory required reversal of the district court's summary judgment.
- Whether the district court's alternative determination that Gould failed to create a genuine issue of material fact concerning bad faith independently supported summary judgment.
Holdings
- A party forfeits a contractual interpretation theory when it advances on appeal an altogether new interpretation of the same legal text rather than merely presenting a new argument or authority in support of its previously presented interpretation.
- Gould's forfeited no-discretion theory did not require reversal because the district court independently granted summary judgment on the ground that Gould failed to create a genuine issue of material fact concerning whether Interface acted in bad faith.
Key quotations
“Waiver is the “intentional relinquishment or abandonment of a known right.” Forfeiture, by contrast, “is the failure to make the timely assertion of a right.”” (at 11-12)
“And when a party contends on appeal that a legal text means something different from what it posited below, it crosses over to the “issue” side of the issue-argument divide.” (at 18)
“If a party advances an altogether new interpretation of a legal text on appeal—different from the one he embraced in the district court—he impermissibly raises a new issue.” (at 21)
Factual background
Jay D. Gould was Interface's CEO. Interface alleged that Gould became intoxicated at an annual sales meeting and repeatedly directed a gendered slur at an employee, following an earlier alcohol-related sexual-harassment incident for which he had been sanctioned and counseled. After an investigation by King & Spalding, Interface's board unanimously terminated Gould for cause under an employment agreement that defined cause and provided that the company could terminate him in its sole discretion. The for-cause termination potentially reduced Gould's compensation by approximately $10 million compared with a termination without cause.
Procedural history
Gould sued Interface after the company terminated him as CEO for cause, alleging that Interface breached his employment agreement. The magistrate judge recommended summary judgment for Interface on two independent grounds: the agreement gave Interface absolute discretion to determine cause, and Gould failed to show bad faith even if that discretion was qualified. The district court adopted the recommendation and denied Gould's motion for reconsideration, which was based on a new theory that Interface had no discretion to determine cause. The Eleventh Circuit held that Gould forfeited that new theory and affirmed on the independent ground that remained dispositive.