Failure To Make Payment In Florida Does Not (Without More) Allow Court to Exercise Personal Jurisdiction

In Cornerstone Investment Funding v. Painted Post Group (4D15-1907), the Fourth District reviewed a trial court's order denying a motion to dismiss for lack of personal jurisdiction. The procedural history is somewhat unique but the holding is not. After conducting an evidentiary hearing, the trial judge "concluded that Post Group had established both jurisdictional facts and minimum contacts between Cornerstone and Florida sufficient to assert personal jurisdiction over Cornerstone."

The Fourth District noted that to satisfy the requirements of personal jurisdiction, you must satisfy a two-pronged test. Specifically, personal jurisdiction may be exercised only when:

(1) the complaint alleges facts that would subject the defendant to Florida’s “long- arm” statute, and (2) the defendant has sufficient “minimum contacts” to meet traditional notions of fair play and substantial justice such that the defendant could ‘“reasonably anticipate being haled into court’” due to its actions. Venetian Salami Co. v. Parthenais, 554 So. 2d 499, 501 (Fla. 1989) (quoting World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980)); Henderson v. Elias, 56 So. 3d 86 (Fla. 4th DCA 2011). 

In this case, the plaintiff satisfied the first prong because "failure to pay on a contract requiring payment in Florida has been found sufficient to satisfy Florida’s long-arm statute conferring jurisdiction over breach of contract actions. Smith Architectural Grp., Inc. v. Dehaan, 867 So. 2d 434, 436 (Fla. 4th DCA 2004)."

However, the plaintiff failed to satisfy the second prong. The court stated:

The mere fact, however, that Cornerstone allegedly breached a contract by failing to make payments on the contract in Florida would not constitute sufficient minimum contacts with this state to satisfy due process. Taskey v. Burtis, 785 So. 2d 557, 559 (Fla. 4th DCA 2001) (“Factors that go into determining whether sufficient minimum contacts exist include the foreseeability that the defendant’s conduct will result in suit in the forum state and the defendant’s purposeful availment of the forum’s privileges and protections.”); Labry v. Whitney Nat’l Bank, 8 So. 3d 1239, 1241 (Fla. 1st DCA 2009); Ganiko v. Ganiko, 826 So. 2d 391, 394- 95 (Fla. 1st DCA 2002). As neither Post Group’s amended complaint nor Goldin’s hearing testimony showed that any act beyond repayment of the promissory note was required to be performed in Florida, Cornerstone does not have sufficient minimum contacts with this state to support the assertion of personal jurisdiction over it. 

Supreme Court On Personal Jurisdiction, Part II

In a second opinion on personal jurisdiction released today, the Supreme Court reversed an opinion from the Supreme Court of New Jersey that held jurisdiction was permissible based upon the "stream of commerce theory." The Court's judgment was joined by 6 Justices, however, only 4 (including the author) joined the majority opinion. The Court stated:

Here, the Supreme Court of New Jersey, relying in part on Asahi, held that New Jersey’s courts can exercise jurisdiction over a foreign manufacturer of a product so long as the manufacturer “knows or reasonably should know thatits products are distributed through a nationwide distribution system that might lead to those products being sold inany of the fifty states.” Nicastro v. McIntyre Machinery America, Ltd., 201 N. J. 48, 76, 77, 987 A. 2d 575, 591, 592 (2010)....

That decision cannot be sustained. Although the New Jersey Supreme Court issued an extensive opinion with care-ful attention to this Court’s cases and to its own precedent, the “stream of commerce” metaphor carried the decision far afield. Due process protects the defendant’s right not to be coerced except by lawful judicial power. As a general rule, the exercise of judicial power is not lawfulunless the defendant “purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.” Hanson v. Denckla, 357 U. S. 235, 253 (1958). There maybe exceptions, say, for instance, in cases involving an intentional tort. But the general rule is applicable in this products-liability case, and the so-called “stream-of-commerce” doctrine cannot displace it.

Based upon the analysis, which is only partially included above, the Court held:

Due process protects petitioner’s right to be subject only to lawful authority. At no time did petitioner engage in any activities in New Jersey that reveal an intent to invoke or benefit from the protection of its laws. New Jersey is without power to adjudge the rights and liabilities of J. McIntyre, and its exercise of jurisdiction would violate due process. The contrary judgment of the New Jersey Supreme Court is REVERSED.

The opinion in J. McIntyre Machinery, Ltd. v. Nicastro can be viewed HERE. Justice Kennedy wrote the opinion and was joined by  Chief Justice Roberts, Justice Scalia and Justice Thomas. Justice Breyer wrote an opinion concurring in the judgment which Justice Alito joined. Justice Ginsburg, who wrote the other personal jurisdiction opinion released today [see HERE], wrote a dissenting opinion and was joined by Justice Sotomayor and Justice Kagan.

Justice Breyer's opinion concurring in the judgment stated that "Because the incident at issue in this case does not implicate modern concerns, and because the factual record leaves many open questions, this is an unsuitable vehicle for making broad pronouncements that refashion basic jurisdictional rules." Therefore, in his view, "on the record present here, resolving thiscase requires no more than adhering to our precedents."

In her dissent, Justice Ginsburg states:

Under this Court’s pathmarking precedent in International Shoe Co. v. Washington, 326 U. S. 310 (1945), and subsequent decisions, one would expect the answer to be unequivocally, “No.” But instead, six Justices of this Court, in divergent opinions, tell us that the manufacturer has avoided the jurisdiction of our state courts, except perhaps in States where its products are sold in sizeable quantities. Inconceivable as it may have seemed yesterday, the splintered majority today “turn[s] the clock back to the days before modern long-arm statutes when a manufacturer, to avoid being haled into court where a user is injured, need only Pilate-like wash its hands of a product by having independent distributors market it.” Weintraub, A Map Out of the Personal Jurisdiction Labyrinth,28 U. C. Davis L. Rev. 531, 555 (1995).

Supreme Court Issues Personal Jurisdiction Opinion Relating To Foreign Subsidiary Of US Corporation

The Supreme Court, in a unanimous opinion written by Justice Ginsburg, held that three Goodyear USA subsidiaries, organized and operating, respectively, in Luxembourg, Turkey, and France, are not subject to personal jurisdiction in North Carolina. The specific question, as phrased by the Court, was: 

Are foreign subsidiaries of a United States parent corporation amenable to suit in state court on claims unrelated to any activity of the subsidiaries in the forum State?

"A bus accident outside Paris that took the lives of two 13-year-old boys from North Carolina gave rise to the litigation" that ended upon the Supreme Court. The court said

Because the episode-in-suit, the bus accident, occurred in France, and the tire alleged to have caused the accident was manufactured and sold abroad, North Carolina courts lacked specific jurisdiction to adjudicate the controversy.The North Carolina Court of Appeals so acknowledged. Brown v. Meter, 199 N. C. App. 50, 57–58, 681 S. E. 2d 382, 388 (2009). Were the foreign subsidiaries nonetheless amenable to general jurisdiction in North Carolina courts? Confusing or blending general and specific jurisdictional inquiries, the North Carolina courts answered yes.

***

A connection so limited between the forum and the foreign corporation, we hold, is an inadequate basis for the exercise of general jurisdiction. Such a connection does not establish the “continuous and systematic” affiliation necessary to empower North Carolina courts to entertain claims unrelated to the foreign corporation’s contacts withthe State.

The Court's opinion in Goodyear Dunlop Tires Operations, S. A. v. Brown can be viewed HERE.

Fourth District Reverses Order Finding Personal Jurisdiction Because No Contacts With Florida

In Corporacion Aero Angeles v. Fernandez (4D09-4997), the Fourth District reversed a trial court's order and concluded that personal jurisdiction cannot be constitutionally exercised over the appellee. "This case arises out of the breach of an oral brokerage agreement for the sale of a jet owned by Aero Angeles, a Mexican Corporation. The plaintiff, Jaime Gaston Fernandez, claims that he was not paid a commission in connection with the sale and filed suit seeking damages from Aero Angeles.  The corporation contends that it did not enter into a contract to pay him a commission."

As with any personal jurisdiction issue, the contacts with the state of Florida were analyzed-or lack of contacts. The court stated:

The jet was headquartered in Mexico and was never offered for charter flights to Florida or for Florida residents. Palero testified that the company had no type of business in Florida. The company did not have employees, offices, phone listings, bank accounts, leases or sales in Florida. It did not engage in business in Florida and did not register to do business in the state. It did not have an agent in Florida for service of process and never paid Florida taxes. The company did not bring paying passengers to Florida.

With regard to the law and the requirements necessary to satisfy personal jurisdiction, the Court stated:

Stated another way, to satisfy the minimum contacts requirement for purposes of personal jurisdiction a defendant’s contacts (1) must be related to the plaintiff’s cause of action or have given rise to it, (2) must involve some act by which the defendant has purposefully availed itself of the privilege of conducting activities within the forum, and (3) the defendant’s contacts with the forum must be such that the defendant should reasonably anticipate being haled into court there.

In this case, the Fourth District determined that "none of the three criteria for minimum contacts has been satisfied." Therefore:

We conclude that the appellant has not shown that jurisdiction can be constitutionally asserted over Aero Angeles. Specific jurisdiction based upon minimum contacts between Aero Angeles and Florida has not been established. Reversed with directions to dismiss the cause of action for lack of jurisdiction.

On June 29, 2011, the Fourth District released an opinion denying rehearing but adding a paragraph to its original opinion. That additional information can be viewed HERE. 

Order Finding Personal Jurisdiction Over Subsidiary Reversed

In Reynolds American, Inc. v. Gero (3D10-2066), the Third District reversed the trial court's order denying a motion to dismiss for lack of personal jurisdiction. The court stated "Because we agree that there are insufficient jurisdictional facts to bring this action within the purview of Florida's long-arm statute, we reverse." The court reviewed the applicable test that is to be applied to a personal jurisdiction question as follows:

In Venetian Salami Co., the Florida Supreme Court set forth the procedure for determining whether personal jurisdiction over a foreign corporation is appropriate. This two-step inquiry requires a the trial court to first determine whether sufficient jurisdictional facts exist to bring the action within the ambit of Florida's long-arm statute (section 48.193), and then to determine whether the foreign corporation possesses sufficient “minimum contacts” with Florida to satisfy federal constitutional due process requirements. Venetian Salami Co., 554 So. 2d at 502.

Applying the test to this case, the court stated

In this case, Gero alleged specific jurisdiction over RAI and RGP on an agency theory, claiming that RJR, acting as RAI and RGP's agent, committed a tortious act in Florida, see § 48.193(1)(b), Fla. Stat. (2010), and breached a contract in Florida. See § 48.193(1)(g), Fla. Stat. (2010)......According to Gero, who concededly “never dealt” with RAI or RGP while in Florida or elsewhere, RAI and RGP are subject to personal jurisdiction in Miami-Dade County because RJR, RAI, and RGP are all agents of one another. More particularly, Gero claims that these entities are all agents of one another....

With regard to the agency claims, "An agency relationship exists where the following are demonstrated: “1) acknowledgment by the principal that the agent will act for it; 2) the agent's acceptance of the undertaking; and 3) control by the principal over the action of the agent....None of these elements is alleged or demonstrated to exist here.”

Ultimately, the court concluded "In short, we agree with RAI and RGP that insufficient jurisdictional facts exist to confer personal jurisdiction over them under Florida's long-arm statute. While this conclusion makes it unnecessary to address the constitutional prong of Venetian Salami Co., we nonetheless note that even if the undisputed facts fell within the ambit of section 48.193, RAI and RGP's conduct would still not be such that they should reasonably anticipate being haled into court in Florida."

Dismissal For Lack Of Personal Jurisdiction Required When Complaint Fails To Allege Jurisdiction

In Henderson v. Elias (4D10-458 & 4D10-1135), the Fourth District reversed the trial court's order denying a motion to dismiss for lack of personal jurisdiction.  The appellants filed a motion in the trial court seeking to dismiss for lack of personal jurisdiction and, among other things, to dismiss for inconvenient forum.  Both the jurisdictional issue and the forum issue were appealed but only the jurisdictional issue warranted reversal.  

The original complaint [petition] included the bare jurisdictional allegation that "the court possessed  jurisdiction over Stardale because of the court’s 'inherent jurisdiction to monitor the administration of the [e]state'.” The appellants filed a motion to dismiss which resulted in the appellee's filing an amended petition.  

In the amended petition, the personal representative alleged that the probate court had jurisdiction over Stardale pursuant to the court’s “inherent jurisdiction to monitor the administration of an   estate, including the authority to issue injunctions freezing assets claimed to belong to a decedent’s estate.” In addition, the personal  representative alleged  that  Stardale was “owned 50% by the  [e]state and 50% by Henderson.” Stardale filed a  motion to dismiss, claiming insufficient service of process.

 ***

Henderson filed another motion to dismiss the amended petition on the grounds that Stardale was an  indispensible party to any injunctive relief  the court might grant.  In the meantime, the estate personally served Stardale’s registered agent....Henderson’s counsel, who had also been Stardale’s counsel at the prior hearing, advised the probate court that he was appearing on   behalf of Stardale on a limited  basis to contest jurisdiction. The estate argued that the court had personal jurisdiction over Stardale because Stardale’s primary place of  business was in Palm  Beach County. Additionally, Stardale borrowed money from Elias and from Lydian Bank, and those obligations arose  in  Palm  Beach County. Payment on these loans was also to be made in Palm Beach County....Stardale responded by arguing that, since it was a foreign corporation, the estate was required to plead jurisdictional allegations in its amended petition which were sufficient to establish personal jurisdiction over Stardale. Stardale went on to argue that the jurisdiction allegations in the amended petition were insufficient to show that Stardale’s conduct fell within the scope of Florida’s long-arm statute, section 48.193(1), Florida Statutes (2009), or to show that Stardale had sufficient  minimum contacts with Florida to satisfy constitutional due process requirements.   

The court then discussed the two-part test that is used when a non-resident defendant challenges a court's personal jurisdiction over it. “‘First, it must be determined that the  complaint alleges sufficient jurisdictional facts to bring the action within the ambit’of  Florida’s long-arm statute,  section  48.193.”...“If so, ‘the next  inquiry is whether sufficient  “minimum contacts” are demonstrated to satisfy due process requirements.’”

Initially, it is the plaintiff's burden to plead sufficient allegations to establish personal jurisdiction over a non-resident defendant "by pleading the basis for service in the language of the statute without pleading the supporting facts."  In response, the defendant can file a motion to dismiss which, by itself, "does nothing more than raise the legal sufficiency of the pleadings." To contest the actual allegations, the defendant "must file  affidavits in support of his position."..."The burden is then placed upon the plaintiff to prove by affidavit the basis upon which jurisdiction may be obtained."

In this case, the appellant did not file affidavits in support of his position and, therefore, only challenged the legal sufficiency of the pleadings.  Therefore, the court "need only address the first prong."  However, in this case, the plaintiff had failed to satisfy the first prong.  The plaintiff/appellee:

made no allegations of conduct by Stardale which would subject the corporation to the jurisdiction of a Florida court under section 48.193(1)....The petition contains no allegations that Stardale is Henderson’s alter ego....Likewise, no allegations of a principal-agent relationship were found in the petition....Because the allegations in the petition are insufficient, the trial court should have dismissed the amended petition as to Stardale without prejudice.

Service Of Process On Distributor Quashed

In Sunseeker International Limited v. Devers (4D10-2997), the Fourth District reversed the trial court's ruling  that refused to quash service of process.

The underlying dispute arose over a buyer’s dissatisfaction with a boat purchased from the manufacturer. The plaintiff filed a complaint against the manufacturer, Sunseeker International Limited, the authorized distributor, Sunseeker USA, Inc., and Jefferson Beach Yacht Sales, Inc., a Michigan broker/dealer. The manufacturer is a corporation organized under the laws of the United Kingdom with its principal office and factory in Poole,  Dorest, England.  All yachts are manufactured in the United Kingdom.

The plaintiff served a distributor with the complaint and told the trial court that the manufacturer was authorized to do business in Florida but did not have a registered agent in Florida.  Therefore, according to the plaintiff, service could be accomplished by serving the distributor.  The manufacturer responded that it had not been authorized to do business in Florida since 2004 and, therefore, service could not be accomplished on the distributor.  The Fourth District agreed with the manufacturer, quashed service of process and remanded the case.  The court stated:

Here, the buyer failed to allege that the distributor was a business agent of the manufacturer or an agent transacting business for it.

The buyer also failed to prove the distributor was the business agent of  the manufacturer.  The buyer provided the trial court with only a printout from the Secretary of  State’s website.  Significantly, that printout revealed that the manufacturer  had withdrawn its registration in 2004.  The buyer therefore failed to sustain its burden of proof.

The buyer having failed to establish compliance with Florida’s statutory requirements for  service of  process, the trial court erred  in denying the motion to quash service of process.  The case is reversed and remanded.

On remand, after proper service is accomplished, the trial court will be able to deal with personal jurisdiction issues.  One other point was made in a footnote.  The court stated:

The buyer argues that the manufacturer waived personal jurisdiction because it first filed a motion for extension of time in which it advised it would contest personal jurisdiction.  We disagree.  The motion for extension of  time did not waive personal jurisdiction because it did not go to the merits of the case.  Moo Young v. Air Canada, 445 So. 2d 1102 (Fla. 4th DCA 1984).

 [emphasis supplied].

Third District Dismisses Appeal Of Order Dismissing Case With Prejudice As Premature

In U.S. Bank, N.A. v. Torres (3D10-3386), the Third District dismissed an appeal for lack of jurisdiction.  The case involved an appeal of "the trial court’s December 9, 2010 Order striking U.S. Bank’s pleadings, dismissing U.S. Bank’s case with prejudice, and requiring the appearance of U.S. Bank and its counsel to surrender the Note on January 3, 2011."  The court stated:

We agree with Torres that the appeal is premature and as such, we grant Torres’ motion to dismiss U.S. Bank’s appeal.  In addition, we deny U.S. Bank’s motion for stay pending review, with the  understanding that once the trial court rules at the hearing on January 3, 2011, U.S. Bank will  have the opportunity to appeal the trial court’s decision if it chooses to do so and seek a stay from the trial court’s order at that point. 

Service of Process Statutes Require Strict Compliance

In the past week the Third District has released two opinions relating to service of process.  In both cases a final judgment was reversed because service of process had not been accomplished.  The message is clear, if it wasn't before, service statutes must be strictly complied with.  Both decisions are discussed below.

Opella v. Bayview Loan Servicing, LLC (3D09-2921)

The appellant appealed a summary judgment of foreclosure claiming that he had never been served.  The court stated: "Because the record unequivocally confirms that Opella was neither served with process nor waived service, we reverse."

While Bayview made a number of attempts to serve Opella individually and on behalf of 21 NW 59th Street, Inc., it never managed to serve process on him....Despite the fact that neither Opella  nor 21 NW 59th Street, Inc. had been served with process, Bayview moved for summary judgment against both, expressly alleging that “[s]ervice of process has been properly perfected upon the Defendants herein.”  Following a hearing on this motion, a final summary judgment of foreclosure was entered in pertinent part upon a finding that “[s]ervice of process has been duly and regularly obtained over NW 59TH STREET, INC., [and] STEVEN R. OPELLA . . . .

The Third District disagreed and stated "Because the record unequivocally confirms that no service of any kind was had on Opella, we agree [with Opella]." The court also stated:

We also reject Bayview’s argument that Opella and 21 NW 59th Street, Inc. failed to raise, and thereby waived, sufficiency of service of process in their “pro se answer.”  We reject this argument, first because neither Opella nor 21 NW 59th Street, Inc. filed a pro se answer or otherwise made an appearance in the court below.  Rather, one month after  it moved for summary judgment,  Bayview’s attorney, Brian L. Rosaler, concededly without agreement or authorization from Opella or 21 NW 59th Street, Inc., filed  a “Notice of Filing Defendant’s Pro Se Answer,” notifying the court below that Bayview was filing Opella and 21 NW 59th Street, Inc.’s pro se answer.  Attached to this notice was an undated letter that Opella purportedly sent to  Rosaler, Bayview’s attorney, offering to settle the parties’ dispute over the subject mortgage.  On these facts, we see no basis on which to conclude that Opella and 21 NW 59th Street,  Inc. either expressly or indirectly waived service of process or otherwise subjected themselves to the jurisdiction of the courts....

Second, the purported “answer” filed by Brian L. Rosaler, Bayview’s attorney, is nothing more than an undated letter to counsel for one of the litigants.  This document does not remotely resemble an answer which under Florida Rule of Civil Procedure 1.100(c) must “have a caption containing the name of the court, the file number, the name of the first  party on each side with an appropriate indication of other parties, and a designation identifying the party filing it and its nature or the nature of the order, as the case may be.”  

Bennett v. Christiana Bank & Trust Company (3D09-2653)

As with the Opella case above, the Third District reversed a judgment based upon the failure to serve the defendant with the complaint.  The court stated:

The plaintiff’s attorneys, Golson Felberbaum Law Firm, hired Pro-Vest LLC, a process service company, to serve Ms. Bennett.  Christopher P. Mas, a Pro-Vest employee, filed a verified return of service on December 29, 2008.  The return indicated that individual service was accomplished on December  20 at 4:13 p.m.  The return further indicated that “DEFENDANT REFUSED TO DISCLOSE MILITARY STATUS; PROPERTY IS NOT A MOBILE HOME.  I  asked the person spoken to if the person served is married and I received a negative reply.”.....However, the front and reverse sides of the summons attached to the return were covered with the process server’s notes.  These notes reflected the server’s attempts to serve Ms. Bennett at her house to no avail....

Ms. Bennett never filed a responsive pleading in the case.  Christiana Bank filed motions for default and for summary judgment.  In May 2009, Christiana Bank obtained an order granting default and a final foreclosure judgment.  The sale was scheduled for September 4, 2009.   

On September 2, Ms. Bennett, through counsel, filed a motion to vacate the judgment and to stay the foreclosure sale.  The trial court denied the motion to stay the sale, but granted Ms. Bennett a hearing on the motion to vacate.....After the hearing, the court entered an order  finding that the service was “questionable,” but that there was no meritorious defense to the foreclosure.  The court denied the motion to vacate.

With regard to the law, the court stated:

A process server’s return which is regular on its face is presumed valid absent clear and convincing evidence to the contrary....Moreover, a simple denial is insufficient to impeach the validity of service....However, in this case, Ms. Bennett raised more than her own sworn denial.  The process server’s own notes, an admission against the interest of his principal, see § 90.803(18)(d), Fla. Stat. (2009), prove the insufficiency of service.  The process server’s last entry reflects that he “Saw Curtains Move, Read Aloud Docs, SVP Docs at Door.” 

Christiana Bank argues that there is no testimony to explain what “SVP” means, but “Docs at Door” is quite self-explanatory.  Curtains may move because of the wind or curious cats, and not just because some prospective defendant is attempting to avoid service.  The pertinent statute is clear...The process server’s notes contain  no evidence of compliance with these requirements.  Rather, the notes squarely conflict with his attestation that Ms. Bennett herself refused to disclose a military status.  As to Ms. Bennett’s marital status, the process server stated: “I asked the person spoken to if the person served is married and I received a negative reply.”  That recitation avoided an identification of the “person spoken to” and again implies that “the person served” was personally handed the papers.  

Far more troubling is the fact that Christiana Bank and its attorneys ignored this discrepancy in the return of service.  In its motion for summary judgment Christiana Bank alleges that the “Defendant(s) were duly and regularly served with process.”  The Bank’s proposed Final Judgment of Foreclosure, prepared by its attorneys, stated: “Service of process having been duly and regularly obtained over DEBBIE BENNETT ....”

***

Once a defect in the return of service is shown, the burden of demonstrating regular service is on the party seeking to invoke the court’s jurisdiction....That burden was not met here.....Where no in personam jurisdiction is obtained over a defendant, the defendant is not required to demonstrate  a meritorious defense to set aside the default.....The trial court should not have required Ms. Bennett to demonstrate a meritorious defense to the action once it became clear that the summons and complaint were never properly served.

Seventh Circuit Opinion Regarding Personal Jurisdiction For Online Actions

In uBID, Inc. v. The GoDaddy Group, Inc., the Seventh Circuit released an interesting opinion relating to personal jurisdiction.  The court stated:

Plaintiff uBID, Inc. is a Chicago-based company that auctions the excess inventory of manufacturers and retailers over the Internet. It brought suit in Illinois against The GoDaddy Group, Inc., which operates the well-known domain name registration site GoDaddy.com. In its complaint, uBID alleged that GoDaddy violated the Anti-Cybersquatting Consumer Protection Act, 15 U.S.C. § 1125(d), by intentionally registering domain names that are confusingly similar to uBID’s trademarks and domain names for the purpose of profiting from uBID’s marks and exploiting web surfers’ confusion by selling advertising for those confusingly similar websites. The district court dismissed the case for lack of personal jurisdiction, holding that GoDaddy, which is headquartered in Arizona, lacked sufficient contacts with Illinois to be sued there. See uBID, Inc. v. GoDaddy Group, Inc., 673 F. Supp. 2d 621 (N.D. Ill. 2009). We reverse. We conclude that due process is not violated when a defendant is called to account for the alleged consequences of its deliberate exploitation of the market in the forum state.

After a discussion of GoDaddy's contacts with Illinois and the law relating to personal jurisdiction, the court stated:

GoDaddy has thoroughly, deliberately, and successfully exploited the Illinois market. Its attempt to portray itself either as a local Arizona outfit or as a mindless collection of servers is unconvincing. This is a company that, like the national magazine in Keeton, has conducted extensive national advertising and made significant national sales. GoDaddy has aired many television advertisements on national networks, including six straight years of Super Bowl ads. It has engaged in extensive venue advertising and celebrity and sports sponsorships. All of this marketing has successfully reached Illinois consumers, who have flocked to GoDaddy by the hundreds of thousands and have sent many millions of dollars to the company each year. These contacts establish GoDaddy’s minimum contacts with the state for claims sufficiently related to those contacts.

GoDaddy seeks to distance itself from Illinois by casting the Illinois market as simply one among many, a place of no particular interest to it. Although its ads can be seen on Illinois television sets and computer screens and at Illinois sports venues, GoDaddy contends that these are only parts of a national advertising campaign and that it does not target its advertising toward Illinois residents in particular. Likewise, GoDaddy argues that its sales in Illinois are merely “the unilateral activity of Illinois residents” entered into “at the initiative of the customers,” and processed automatically by GoDaddy’s servers in Arizona. These characterizations of GoDaddy’s contacts with Illinois are inaccurate.

***

Mere minimum contacts, however, are not sufficient to establish specific personal jurisdiction. As the Supreme Court has emphasized, it is essential not only that the defendant have minimum contacts with the forum state but also that the plaintiff’s claim against the defendant “arise out of or relate to” those contacts......

The relationship between GoDaddy’s Illinois contacts and uBID’s claims is close enough to make the relatedness quid pro quo balanced and reasonable. GoDaddy has reached hundreds of thousands of people in Illinois with its advertising, which we know because it has made hundreds of thousands of sales in Illinois. How has GoDaddy advertised and made these sales? Based on the allegations in uBID’s complaint, it has done so “by offering ‘free parking’ of a registrant’s domain name.”

The text above is only a small portion of the Court's majority opinion.  Judge Manion wrote a concurring opinion that stated:

I agree with the court that personal jurisdiction in Illinois is proper.  I write separately because under the facts of this case, I would apply a more limited formula for connecting GoDaddy’s contacts in Illinois with uBID’s claim. In my view, personal jurisdiction in Illinois is proper for the simple reason that uBID is headquartered in Illinois, and that is where GoDaddy has directed, and uBID will be affected by, the harm at issue....The court’s formula for connecting GoDaddy’s contacts in Illinois with uBID’s claim is, in my view, unnecessarily broad.

Earlier this year, the Florida Supreme Court released an opinion relating to personal jurisdiction over a person  who made posts on a website.  That case was discussed at the following post: "Posting Statements On A Website Subjects A Person To Suit Under Florida's Long Arm Statute."

Fourth District Quashes Service of Process on Bank Teller

In Bank of America, N.A. v. Bornstein (4D09-4007), the Fourth District reversed service of process that had been acomplished on a teller at a Bank of America branch.  The court described the facts as follows:

Bornstein obtained and served a writ of garnishment on Bank of America, commanding the bank to serve an answer on Bornstein’s counsel regarding whether the bank was indebted to the defendants. The return of service stated that the process server served the writ of garnishment at a Bank of America branch in West  Palm Beach o n “Felicia Assaroupe as Teller,” who said she was authorized to accept on behalf of the person to whom the process was directed.

Bank of America moved to quash service of process for failure to comply with sections 48.081 and 655.0201, Florida Statutes (2009). Neither of the statutes permits service of process on a national association through a branch employee.

With regard to the legal analysis, the court stated:

The standard of review of a non-final order that determines the jurisdiction of a person is de novo...Statutes governing service of process should be strictly construed, and valid service on a corporation may be effected only by complying with such statutes...Absent strict compliance, the court lacks personal jurisdiction over the corporation.

***

The object of section 48.081 is to have service made upon someone who is held responsible by the corporation, “and it contemplates that service shall be made, whenever possible, upon the more responsible officers before resorting to service upon one of the inferior officers or agents of the corporation.”...“To obtain personal jurisdiction over a corporate defendant, a return of process showing service on an inferior officer of a corporation must show that all superior officers designated in the statute were absent when service was attempted.”

***

We conclude that the trial court erred in denying the motion to quash because service was improper in that it failed to comply with the applicable statutes and case law. Neither the original nor the amended return of service showed the absence of the statutorily prescribed superior classes of persons who could have been served. The original return of service made no mention of the absence of any such persons. The amended return of service noted that an officer was present in the bank, but the process server served a bank teller, rather than the officer.  The bank teller did not meet the definition of a business agent.

Posting Statements On A Website Subjects A Person To Suit Under Florida's Long Arm Statute

In Internet Solutions Corporation v. Tabatha Marshall (SC09-272), the Florida Supreme Court answered a certified question from the Eleventh Circuit relating to personal jurisdiction.  Ultimately, the court concluded that a person that posts statements on a website is subject an action for defamation in Florida under Florida's long arm statute.  However, the Florida Supreme Court did not address whether subjecting the person to personal jurisdiction would violate due process.  The question, as amended by the Florida Supreme Court, was:

DOES A NONRESIDENT COMMIT A TORTIOUS ACT WITHIN FLORIDA FOR PURPOSES OF SECTION 48.193(1)(b) WHEN HE OR SHE MAKES ALLEGEDLY DEFAMATORY STATEMENTS ABOUT A COMPANY WITH ITS PRINCIPAL PLACE OF BUSINESS IN FLORIDA BY POSTING THOSE STATEMENTS ON A WEBSITE, WHERE THE WEBSITE POSTS CONTAINING THE STATEMENTS ARE ACCESSIBLE AND ACCESSED IN FLORIDA?

"According to Internet Solutions Corporation (ISC), Marshall made posts on her website in which she accused ISC, an employment and recruiting firm, of ongoing criminal activity. ISC, whose principal place of business is in Florida, sued Marshall for defamation in a federal district court in Florida."  Marshall moved to dismiss the lawsuit for lack of personal jurisdiction and the district court agreed.  Internet Solutions Corp. v. Marshall, No. 6:07-cv-1740-Orl-22KRS, 2008 WL 958136 (M.D. Fla. Apr. 8, 2008).  The Florida Supreme Court stated:

In this case, the Eleventh Circuit recognized that, under Wendt, Marshall would be subject to jurisdiction under section 48.193(1)(b) if her allegedly defamatory posts on her website constituted electronic communications "into Florida."  Internet Solutions Corp., 557 F.3d at 1296. The determination of whether certain acts constitute communications into Florida is straightforward when the case concerns telephonic communications, written communications, or electronic communications in the form of e-mails or facsimiles, because those communications are directed to reach a specific recipient in a specific forum; in other words, it is clear that the nonresident defendant‘s communications were made into Florida.

***

Courts have also held that electronic communications over the Internet in the form of e-mails and chat room conversations into Florida give rise to personal jurisdiction under section 48.193(1)(b) on the basis of Wendt.

***

The question of whether a posting on a website, which is located on the World Wide Web, constitutes an electronic communication into Florida is a more difficult one than telephone calls, e-mails, chat rooms, and facsimiles because the posting is typically accessible from any state and is not directed by the alleged tortfeasor into a particular forum in the same way as a phone call, letter, e-mail, chat room, or facsimile.

***

At the outset, it is important to note that the Internet and the World Wide Web are not synonymous. The Internet is the world‘s largest computer network...There are multiple ways to transmit and receive information across the Internet, including e-mails, chat rooms, and the World Wide Web..."[T]he Web constitutes the body of information available, and the Internet refers only to the means by which one can access that information."..."Individuals commonly access the Internet through a commercial Internet Service Provider (ISP) and then use a browser to access resources and information on the World Wide Web."

***

We conclude that allegedly defamatory material about a Florida resident placed on the Web and accessible in Florida constitutes an "electronic communication into Florida" when the material is accessed (or "published") in Florida. In the context of the World Wide Web, given its pervasiveness, an alleged tortfeasor who posts allegedly defamatory material on a website has intentionally made the material almost instantly available everywhere the material is accessible. By posting allegedly defamatory material on the Web about a Florida resident, the poster has directed the communication about a Florida resident to readers worldwide, including potential readers within Florida. When the posting is then accessed by a third party in Florida, the material has been "published" in Florida and the poster has communicated the material "into" Florida, thereby committing the tortious act of defamation within Florida. This interpretation is consistent with the approach taken regarding other forms of communication.

***

Applying this approach, Marshall's posting of allegedly defamatory material about a Florida company that was accessible in Florida constitutes committing a tortious act within Florida, provided that the material was accessed—and thus published—in Florida.

Marshall asserts that her acts were completed in the State of Washington and nothing on the website could be published to a Florida computer "unless (and until) the reader reached up into Washington and retrieved it." We reject this argument because it ignores the nature of the Web, which is fundamentally different from a telephone call, an e-mail, or a letter—by posting on her website, Marshall made the material accessible by anyone with Internet access worldwide. Thus, once the allegedly defamatory material is published in Florida, Marshall has committed the tortious act of defamation within Florida for purposes of Florida's long-arm statute. We emphasize that we are only asked to address the first step of the inquiry—whether section 48.193(1)(b) applies to confer personal jurisdiction. The second step is a more restrictive one, precluding suit in any situation where the exercise of jurisdiction over the nonresident defendant would violate due process. This question is not before us in the certified question and we do not deem it necessary to broaden the question in order to address the due process inquiry.

Owner of Real Property In Florida Subject To Florida's Long Arm Statute

In Holt v. Wells Fargo Bank, N.A. (4D09-3015), the Fourth District reversed the trial court's order as it related  to personal jurisdiction. 

In 1993, the legislature amended [48.193(1)(c), Florida Statutes], adding the words “holding a mortgage or other lien on,” such that the statute now provides “[o]wning, using, possessing, or holding a mortgage or other lien on any real property within this state” gives rise to personal jurisdiction.  Despite the appellant’s argument to the contrary, we do not believe that the amendment eliminated the ownership of real property as a basis for the establishment of personal jurisdiction and the exercise of long-arm jurisdiction. In context, the amended statute is more reasonably read as extending personal long-arm jurisdiction to those “holding a mortgage or other lien on” real property in Florida, rather than eliminating the longstanding jurisdictional basis for those “owning...real property within this state.” The complaint in this case alleged Holt’s ownership of Florida real property and thus the trial court erred in ruling it lacked the personal jurisdiction necessary to support the entry of a deficiency judgment.

Prejudgment Interest Not Available On Anticipated Lost Profits & Actions In Trial Court After Notice of Appeal

In Lauderdale Marine Center, LTD. v. MYD Marine Distributors, Inc. (4D08-3638 & 4D09-446), the Fourth District addressed two issues.  First, the court addressed prejudgment interest.  The court stated:

Prejudgment interest may be awarded where the plaintiff suffers an out-of-pocket pecuniary loss and establishes a fixed date of the loss...Damages are liquidated 'when a verdict has the effect of fixing damages as of a prior date.'...Future damages, such as “anticipated business profits,” are not vested property rights and cannot be liquidated as of a past date certain.

The second issue addressed was issues that happen in the trial court after the filing of a notice of appeal and the court stated:

We also note that we may not consider appellant’s arguments regarding the attorneys’ fee hearing. This court may review only proceedings occurring prior to the date of appellant’s notice of appeal. Fla. R. App. P. 9.110(h). As the notice of appeal was filed months prior to the hearing on attorneys’ fees, we lack jurisdiction to consider the issue.

Eleventh Circuit Holds District Court Lacked Jurisdiction Over TILA Case Based Upon Rooker-Feldman Doctrine

In Parker v. Potter (08-16332, 08-16667), the Eleventh Circuit vacated the decision of the district court and remanded for the entry of an order dismissing the action because the district court lacked jurisdiction under the Rooker-Feldman Doctrine.  The court stated:

In January 2005, a Florida court granted final judgment of foreclosure to Potter against Gary and Yolanda Parker....On February 1, 2006, Parker filed suit against Potter and Money Consultants in the District Court, seeking a restraining order to prevent the sale of the property. DE 1. The District Court dismissed the action with prejudice, Parker v. Potter, No. 8:06-CV-183-T-26EAJ, 2006 WL 1529546 (M.D. Fla. May 24, 2006) (not reported in F. Supp.) (“Parker I”), but this Court vacated and remanded the decision to afford Parker the opportunity to amend her complaint and proceed with an action for rescission under TILA and certain state law fraud claims. Parker v. Potter, 232 F. App’x 861 (11th Cir. 2007) (unpublished) (“Parker II”).

***

Potter avers that the Rooker-Feldman doctrine barred the District Court from reaching a decision on Parker’s claim for rescission.  Noting that a Florida court entered final judgment for foreclosure against Parker before she filed her claim for a rescission under TILA in federal court, Potter alleges that the District Court lacked jurisdiction to review, reverse, or invalidate that final state court decision.

***

In certain circumstances, a federal court must decline or postpone the exercise of its jurisdiction by deferring to the courts of the several states. The doctrine established by the Rooker and Feldman cases essentially holds that federal courts – other than the Supreme Court – do not have subject matter jurisdiction over “cases brought by state-court losers [(1)] complaining of injuries caused by state court judgments rendered before the [federal] district court proceedings commenced and [(2)] inviting district court review and rejection of those judgments.” Exxon Mobil Corp. v. Saudi Basic Indus. Corp., 544 U.S. 280, 284 (2005). 

***

The Rooker-Feldman doctrine barred the District Court from hearing Parker’s claim for rescission under TILA. The same parties in this action participated in the subject state proceeding, and a Florida court granted a final judgment for foreclosure in favor of Potter against Parker.

Corporate Principal Place Of Business Is Where Executives Are Located

In Hertz Corporation v. Friend (08-1107), the United States Supreme Court held that a corporation's principal place of business is where the corporations executives are located.  Writing for a unanimous Court, Justice Breyer stated:

The federal diversity jurisdiction statute provides that “a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business.” 28 U. S. C. §1332(c)(1) (emphasis added). We seek here to resolve different interpretations that the Circuits have given this phrase. In doing so, we place primary weight upon the need for judicial administration of a jurisdictional statute to remain as simple as possible. And we conclude that the phrase “principal place of business” refers to the place where the corporation’s high level officers direct, control, and coordinate the corporation’s activities. Lower federal courts have often metaphorically called that place the corporation’s “nerve center.” See, e.g., Wisconsin Knife Works v. National Metal Crafters, 781 F. 2d 1280, 1282 (CA7 1986); Scot Typewriter Co. v. Underwood Corp., 170 F. Supp. 862, 865 (SDNY 1959) (Weinfeld, J.). We believe that the “nerve center” will typically be found at a corporation’s headquarters.

Articles can be found at: Reuters, ABC News, Wall Street Journal, and Business Week.

Eleventh Circuit Modifies Test To Be Used When Applying The Georgia Long Arm Statute

In Diamond Crystal Brands, Inc. v. Food Movers International, Inc. (08-14782), the Eleventh Circuit modified the personal jurisdiction test to be used when applying the Georgia long arm statute to conform to recent decisions from the Georgia Supreme Court.  Specifically, the court stated "In Innovative Clinical & Consulting Servs., LLC v. First Nat’l Bank of Ames, Iowa, 620 S.E. 2d 352, 355–56 (Ga. 2005), the Georgia Supreme Court held that a trial court must engage in a separate, literal application of the Georgia long-arm statute in addition to a due process inquiry in deciding whether personal jurisdiction exists over a nonresident defendant."

Email Sent Into Florida Subjects Defendant To Personal Jurisdiction When Suit Relates To Email

In Price v. Kronenberger (5D09-667), the Fifth District reversed the trial court's decision dismissing an action for lack of personal jurisdiction.  The defendant was subject to jurisdiction based upon the facts alleged in the complaint because the defendant sent an email targeted at the state of Florida and the lawsuit was directly related to the email.  The court set out the facts as follows:

Price and John F. Kronenberger, Appellee, were members of the Korean War Veteran's Association (hereinafter "KWVA"). About a year after being expelled from the KWVA, Kronenberger, an Illinois resident, sent an e-mail to various members informing them that Price, a Florida resident, earned his law degree from a "correspondence school where you send in a check and they send you a degree. Monticello is an Internet University that grants Juris Doctor degrees with no schooling required." The email also stated, "After a call to the American Bar Association it was learned that there is no Monticello School of Law accredited in the US." This e-mail was received by members throughout the country, some of whom live in Florida. Price attached this email to his complaint when he sued Kronenberger for defamation.

The court held that:

Section 48.193(1)(b) provides specific long-arm jurisdiction over a nonresident who commits a tortious act in this state. A complaint that alleges a nonresident committed a tortious act based on communications directed into Florida telephonically, electronically, or in writing sufficiently alleges personal jurisdiction under section 48.193(1)(b)....By publishing the e-mail in Florida and directing the defamatory comments at a Florida resident, Kronenberger established minimum contacts with this state.

In summary, the court stated:

Based on the foregoing, we find that Price's complaint sufficiently alleged facts to support personal jurisdiction over Kronenberger and that by sending the e-mail into Florida, Kronenberger established sufficient minimum contacts such that he could reasonably anticipate being haled into a Florida court.1 Consequently, we reverse the final judgment dismissing Price's complaint and remand for proceedings consistent with this opinion.

Eleventh Circuit Dismisses Discrimination Case Against The University of Florida As Moot

In Beta Upsilon Chi Upsilon v. J. Bernard Machen,  in his official capacity as President of the University of Florida, et al. (08-13332), the Eleventh Circuit dismissed an appeal as moot and ordered the trial court to dismiss the case. 

BYX is a national fraternity founded in 1985. It has twenty-two chapters in nine states. According to its constitution, it “exists for the purpose of establishing brotherhood and unity among college men based on the common bond of Jesus Christ.” BYX espouses a strict approach to the Christian faith, and membership in the fraternity is contingent upon what the fraternity deems “a credible profession of faith in Jesus Christ.” This requires agreement not only with the traditional core Christian beliefs and values contained in such ancient expressions as the Nicene Creed, but adherence to a demanding view of the faith. In its doctrinal statement, BYX explains that members must “believe that the Bible is God’s written revelation to man, that it is inspired, authoritative, and without error in the original manuscripts.” Accordingly, BYX bars from membership non-Christians, Roman Catholics, and adherents to the traditional Christian orthodoxy taught by the mainline Protestant denominations.

***

The University of Florida permits and encourages student organizations to undergo its registration process and become Registered Student Organizations (“RSOs”)....UF requires that RSOs abide by the University’s nondiscrimination policy, as derived from UF Regulation 6C1-1.006(1) available at http://regulations.ufl.edu/chapter1/1006.pdf. (the “Policy” or “Handbook Policy”). The Policy states that UF “is committed to non-discrimination with respect to race, creed, color, religion, age, disability, sex, sexual orientation, marital status,  national origin, political opinions or affiliations, and veteran status” and states that “[t]his commitment applies in all areas,” including “to students.”

***

BYX filed a motion for preliminary injunction. In its motion, BYX claimed that because UF had denied its chapter RSO status during Fall Rush, it was unable to advertise or host any of its rush meetings or activities on campus. As a result, the chapter was only able to recruit three new pledges, whereas other Christian fraternities were able to recruit substantially greater numbers.

***

On May 29, 2008, over seven months after BYX filed its motion for a preliminary injunction, the district court entered an order denying the motion. In its order, the court rejected BYX’s expressive association and viewpoint discrimination claims. The court found no evidence that the Handbook Policy would “significantly affect BYX’s ability to express itself—publicly or privately.” Machen, 559 F. Supp. 2d at 1278.

***

On June 6, 2008, BYX filed a notice of appeal challenging the district court’s May 29 order, and moved this court for an injunction pending appeal. On July 30, a panel of this court entered an order granting BYX’s motion and an injunction issued...The panel issued the injunction after considering four factors: (1) whether the movant was likely to prevail on the merits of its appeal; (2) whether, if the injunction did not issue, the movant would suffer irreparable harm; (3) whether, if the injunction issued, any other party would suffer substantial harm; and (4) whether an injunction would serve the public interest.

***

On January 15, 2009, after we heard oral argument, the University announced that it had modified the Handbook Policy...[and] moved this court to dismiss this appeal for mootness.

***

The Constitution confines the jurisdiction of the federal courts to actual “Cases” or “Controversies.” U.S. Const. art. III, § 2, cl. 1. This prerequisite must be satisfied at each stage of the litigation...The law is clear that if, pending an appeal, events transpire that make it impossible for this court to provide meaningful relief, the matter is no longer justiciable...This is so even if, as here, the court has heard oral argument and has taken the case under advisement.

***

BYX grounds its argument in the “voluntary cessation” doctrine, which provides that the “[m]ere voluntary cessation of allegedly illegal conduct does not moot a case.”...The University has modified the Policy in the CSAI Handbook, registered BYX’s chapter, and stated its intention to adhere to its modified policies. BYX speculates that UF amended the Policy as a ploy to avoid an adverse ruling, and UF may reinstate its former policy and strip BYX of its RSO status if the court dismisses the appeal. BYX has failed to present any affirmative evidence to support this position, and we are not persuaded by such speculation. We hold that BYX cannot overcome the presumption that the “objectionable behavior will not recur.” Troiano, 382 F.3d at 1283.

***

In cases where government policies have been challenged, the Supreme Court has held almost uniformly that voluntary cessation of the challenged behavior moots the claim.

***

Our consideration of this case is at an end. Because the relief BYX sought has now been obtained, we lack a live controversy. The University’s motion to dismiss this appeal for mootness is accordingly granted. The order of the district court denying BYX’s motion for a preliminary injunction is vacated, the case is remanded, and the district court, on receipt of our mandate, shall dismiss the case as moot. See United States v. Munsingwear, Inc., 340 U.S. 36, 71 S.Ct. 104, 95 L.Ed. 36 (1950).

Fourth District Dismisses Appeal For Lack of Jurisdiction

In Tarik, Inc. v. NNN Acquisitions, Inc. (4D09-2455),  the Fourth District dismissed an appeal for lack of jurisdiction because "An order granting a motion for summary judgment is a nonappealable order.  Rust v. Brown, 13 So. 3d 1105, 1107 (Fla. 4th DCA 2009). In real property cases, the trial court’s order on a party’s summary judgment motion does not determine the 'immediate right to possession' even though it may resolve the underlying legal issues."