Opinion
CASE NO. 03-21531-CIV-ALTONAGA/Bandstra
October 16, 2003
ORDER OF DISMISSAL FOR IMPROPER VENUE
THIS CAUSE is before the Court upon Defendants, Kaplan, Kenegos Kadin; Jerry Kaplan; Joan Kenegos; David Scott Kadin; Ron Brembry, Bruce Peterson, and Raymond Spruell, individually and d/b/a Association of Parliament Funkadelic Members, 73-81; and Funk Mob Music, LLC's Motion to Dismiss for Lack of Personal Jurisdiction Pursuant to F.R.C.P. 12(b)(2), or in the Alternative to Dismiss or Transfer for Improper Venue ( 28 U.S.C. § 1406(a)), or in the Alternative, to Transfer for Convenience ( 28 U.S.C. § 1404(a)) (D.E. 8), filed on June 26, 2003. The Court has reviewed the Motion, the response and reply memoranda, and applicable law.
FACTUAL ALLEGATIONS OF THE COMPLAINT
This action concerns the ownership of four master sound recordings of songs entitled, "Uncle Jam Wants You," "One Nation Under a Groove," "Electric Spanking of War Babies," and "Hardcore Jollies" (collectively the "Masters"), ft is alleged that Plaintiff, Nene Montes ("Montes") is, and was at all relevant times, a resident of Miami-Dade County, Florida, and the sole owner of the Association of Parliament Funkadelic Members 73-81, Inc. (The "Florida Association"), a Florida corporation, and Tercer Mundo, Inc. ("Tercer Mundo"), an inactive California corporation. Montes alleges that pursuant to separate agreements with these corporations, he owns and controls 100% of the exclusive rights to manufacture, distribute and sell the Masters. Montes further alleges that in December of 1999, he and Tercer Mundo entered into a licensing agreement with Charly Acquisitions Limited ("Charly"), a record distributor based in England, which granted Charly the exclusive rights to the Masters in all territories of the world, excluding the United States and Canada (the "Montes/Charly Agreement"). The Montes/Charly Agreement was allegedly entered into in Florida and, according to Montes, the agreement is governed by Florida law.
Defendants, Kaplan, Kenegos and Kadin (the "KKK Firm"), and Jerry Kaplan ("Kaplan"), Joan Kenegos ("Kenegos") and David Scott Kadin ("Kadin") (collectively "the KKK Firm Defendants"), are attorneys that have represented Defendants, Ron Brembry ("Brembry"), Bruce Peterson ("Peterson") and Ramond Spruell ("Spruell"). Brembry, Peterson and Spruell are the owners of Funk Mob Music, LLC ("FMM"), a California limited liability company, and the Association Parliament Funkadelic Members (without the "Inc.") (the "California Association"), a California Fictitious Business Name entity.
Montes alleges that between August 2001 and June 2002, Defendants, with full knowledge of Monies' rights to the Florida Association, the Masters, and the Montes/Charly Agreement, communicated to Charly, and to certain other third parties within the music industry, including record companies, record producers, entertainment attorneys, sampling clearinghouses, artists, performers, music publishing societies and others, as well as to state and federal courts, at both trial and appellate levels: (1) that the KKK Firm Defendants legally represented the Florida Association; (2) that the KKK Firm's clients, Brembry, Peterson and Spruell, owned the Florida Association; (3) that the Florida Association owned the Masters; (4) that Montes had absolutely no rights in the Masters or in the Florida Association, and that Montes' claims to ownership of the Masters and to the Florida Association were fabricated and without basis; (5) that Brembry, Peterson and Spruell and/or FMM and/or the California Association unequivocally owned the Masters; (6) that Montes had obviously fabricated documents in an attempt to interfere with Brembry, Peterson and Spruell's rights; and (7) that Brembry, Peterson and Spruell intended to take legal action to enforce their rights against Montes and others who made spurious claims to the Masters (the "Defamatory Statements").
The KKK Finn Defendants, on behalf of their clients, also allegedly interfered with the contractual and advantageous business relationship between Montes and Charly, by stating in correspondence with Charly: (1) that the KKK firm would like to discuss with Charly exploitation of the Masters in Charly's territory; (2) that if Charly did not wish to work out a deal with Brembry, Peterson and Spruell, that the KKK Firm would pursue other avenues with other companies to sell and distribute the Masters in European and Asian markets (Charly's territory); (3) that no monies were to be paid to Montes regarding the Montes/Charly Agreement; and (4) that demand was being made by the KICK Firm that Charly immediately cease and desist selling the Masters in Charly's territory; otherwise, the KKK firm would take all appropriate legal action against Charly to enforce Brembry, Peterson and Spruell's rights. As a result of the alleged contractual interference by Defendants with the Montes/Charly Agreement and the allegedly Defamatory Statements published by Defendants, Charly has suspended negotiations with Montes to expand the existing Montes/Charly Agreement to include the worldwide distribution, by Charly, of other products owned by Montes.
Count I is an action to quiet title against all Defendants concerning the parties' rights, title, or interests in and to the Florida Association and the Masters. Montes seeks an injunction prohibiting the KKK Firm Defendants from claiming to legally represent the Florida Association; and Defendants, California Association, FMM, Brembry, Peterson and Spruell, from claiming any ownership of the Florida Association and the Masters. Montes also seeks a declaratory judgment confirming that Montes is and has been the sole owner of the Florida Association and, since June 19, 1997, the sole owner of the Masters.
Count II is an action to "remove a cloud" against all Defendants. In this Count, Montes seeks an order canceling and voiding any and all documents filed by Defendants with the Secretary of the State of California and the Secretary of the State of New York, and a declaration and determination that the purported assignment of the rights to the Masters, by the Florida Association to Brembry, Peterson and Spruell and/or FMM and/or the California Association, is null and void.
Count III is an action for slander of title against all Defendants grounded upon the seven Defamatory Statements allegedly published by Defendants to Charly and other third parties within the music industry. Mantes alleges that Defendants' acts have caused and will continue to cause Montes irreparable injury, including injury to goodwill of the Florida Association and Montes' business reputation within the music industry. Montes seeks declaratory and injunctive relief, as well as compensatory damages.
Count IV seeks compensatory damages for tortious interference with contractual relationship against the KKK Firm Defendants, Brembry, Peterson, Spruell, and the California Association. This Count is also based on the seven Defamatory Statements.
Count V seeks compensatory damages for tortious interference with advantageous business relationship against the KKK Firm Defendants, Brembry, Peterson, Spruell, and the California Association. This Count is based on the four statements allegedly made in correspondence between the KKK Firm Defendants and Charly.
Count VI is for conversion against the California Association, FMM, Brembry, Peterson and Spruell. Montes alleges that Defendants have converted the Masters and other assets of the Florida Association. Montes seeks an injunction entitling him to immediate possession of the Masters. Montes also demands a judgment for compensatory and punitive damages.
Count VII is for defamation against the KKK Firm Defendants. This Count is also based on the seven Defamatory Statements. Montes demands a judgment for compensatory and punitive damages.
Finally, Count VIII, is for libel per se against the KKK Firm Defendants. Montes alleges that the Defamatory Statements are libel per se because they charged Montes with dishonesty and/or dishonest practices in such a fashion as to prejudice Montes' business and personal reputation within the music industry. Montes seeks a judgment for compensatory and punitive damages.
This count is incorrectly numbered Count IX.
PROCEDURAL BACKGROUND
Montes previously initiated two lawsuits in California concerning rights to and ownership of the Masters. Montes was the plaintiff in one lawsuit, and Tercer Mundo was the plaintiff in the other. The lawsuits were consolidated and ultimately the parties settled. A settlement agreement was entered into between numerous parties, including Ron Brembry, Bruce Peterson, Ramond Spruell, the California Association, and others. The KKK Firm Defendants represented Brembry, Peterson, Spruell and the California Association in connection with the California litigation.
Montes has also filed another related lawsuit in Florida against FMM, Capitol Records, Inc. and Priority Records, LLC (Case No. 02-23074-CIV-ALTONAGA/BANDSTRA), which is pending before this Court, In this related case, which was removed from state court, an Order was entered dismissing FMM for lack of personal jurisdiction. That Order was later vacated to permit Montes to include factual allegations to support personal jurisdiction. Montes filed an Amended Complaint, and FMM has filed a similar motion to dismiss the Amended Complaint in that case, which is pending.
This case, filed on June 5, 2003, is the most recent action filed by Montes against the Defendants and was brought in this Court on the basis of diversity jurisdiction under 28 U.S.C. § 1332. Defendants seek a dismissal on the basis of lack of personal jurisdiction, or alternatively, for improper venue, or alternatively for forum non conveniens.
LEGAL STANDARD
A challenge to personal jurisdiction presents a two-step inquiry for the Court. A federal court sitting in diversity may properly exercise personal jurisdiction over a non-resident defendant only if two requirements are satisfied, namely: (1) the state long-arm statute; and (2) the Due Process Clause of the Fourteenth Amendment to the United States Constitution. Posner, et al v. Essex Ins. Co., Ltd., 178 F.3d 1209, 1214 (11th Cir. 1999); Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 626 (11th Cir. 1996). Thus, if the applicable state statute governing personal jurisdiction is satisfied, the Court must determine whether sufficient "minimum contacts" exist to satisfy the due process requirements of the Fourteenth Amendment, including "traditional notions of fair play and substantial justice." Future Technology Today, Inc. v. OSF Healthcare Sys., 218 F.3d 1247, 1249 (11th Cir. 2000) (per curiam) (citing Sculptchair, 94 F.3d at 626)); see also International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).As the extent of the applicable long-arm statute is governed by Florida law, this Court must construe it as would the Florida Supreme Court. Sculptchair, 94 F.3d at 631. Under Florida law, "[a] plaintiff seeking to obtain jurisdiction over a non-resident defendant initially need only allege jurisdiction." Posner, 178 F.3d at 1214 (citing Electro Eng'g Prods. Co. v. Lewis, 352 So.2d 862, 864 (Fla. 1977)). "Plaintiff's burden in alleging personal jurisdiction is to plead sufficient material facts to establish the basis for exercise of such jurisdiction." Future Technology, 218 F.3d at 1249 (quoting Prentice v. Prentice Colour, Inc., 779 F. Supp. 578, 583 (M.D. Fla. 1991)); see also Venetian Salami Co. v. Parthenais, 554 So.2d 499, 502 (Fla. 1989). If a plaintiff pleads sufficient material facts to support the exercise of personal jurisdiction, the burden shifts to the defendant to challenge the plaintiff's allegations by affidavits or other competent evidence. Future Technology, 218 F.3d at 1249. The plaintiff then bears the burden of proving jurisdiction by affidavits, testimony or documents "when the non-resident defendant raises a meritorious defense to personal jurisdiction through affidavits, documents or testimony." Musiker v. Projectavision, Inc., 960 F. Supp. 292, 294 (S.D. Fla. 1997), Kim v. Keenan, 71 F. Supp.2d 1228, 1231 (M.D. Fla. 1999) ("If defendants sufficiently challenge plaintiff's assertions, then plaintiff must affirmatively support his or her jurisdictional allegations, and may not merely rely upon the factual allegations set forth in the complaint.").
ANALYSIS
A. This Court Lacks Personal Jurisdiction Over All Defendants
1. The Jurisdictional Allegations of the Complaint Satisfy the Florida Long-Arm Statute
The Florida long-arm statute contains two provisions that confer personal jurisdiction over a non-resident defendant. The first, Section 48.193(1) of the Florida Statutes, confers specific jurisdiction if a claim arises from a defendant's specific forum-related contacts. See FLA. STAT. § 48.193(1). The second, Section 48.193(2) of the Florida Statutes, confers general jurisdiction if a defendant's contacts with Florida are sufficiently pervasive. See FLA. STAT. § 48.193(2).
The Complaint alleges only that the Court may exercise specific personal jurisdiction over all Defendants pursuant to Section 48.193(1)(b). Complaint, ¶ 2. The pertinent portion of the Florida long-arm statute concerning specific jurisdiction states:
(1) Any person, whether or not a citizen or resident of this state, who personally or through an agent does any of the acts enumerated in this subsection thereby submits himself or herself and, if he or she is a natural person, his or her personal representative to the jurisdiction of the courts of this state for any cause of action arising from doing any of the following acts:
* * * * *
(b) Committing a tortious act within this state.
FLA. STAT. § 48.193(1). Montes contends that this Court has specific jurisdiction over the Defendants under Section 48.193(1)(b) because tortious acts which occurred outside Florida subjected Montes to injury inside Florida.
Florida courts are deeply divided on the issue of whether a tortious act committed outside the state resulting in injury inside the state subjects the actor to jurisdiction in Florida under subsection (1)(b) of Section 48.193. Posner, et al. v. Essex Ins. Co., Ltd., 178 F.3d at 1216. Several Florida appellate courts have concluded that Section (1)(b) does not extend jurisdiction to the out-of-state defendant under these circumstances. Id. at 1216 (citing Texas Guaranteed Student Loan Corp. v. Ward, 696 So.2d 930, 932 (Fla. 2d DCA 1997) ("The occurrence of injury alone in Florida does not satisfy section 48.193(1)(b)"); McLean Fin. Corp. v. Winslow Loudermilk Corp., 509 So.2d 1373, 1374(Fla. 5th DCA 1987); Jack Pickard Dodge, Inc. v. Yarbrough, 352 So.2d 130, 134(Fla. 1st DCA 1997)). Other appellate courts have reached the opposite conclusion. Id. (citing Wood v. Wall, 666 So.2d 984, 986 (Fla. 3d DCA 1996); Allerton v. State Dep't of Ins., 635 So.2d 36, 40 (Fla. 1st DCA 1994)). The Eleventh Circuit Court of Appeals has held that subsection (1)(b) extends jurisdiction over defendants committing tortious acts outside the state that cause injury in Florida. Posner, 178 F.3d at 1216.
Here, Montes has alleged injuries in Florida resulting from Defendants' alleged tortious acts because he is a Florida resident, and because the company that he claims to own, the Florida Association, is a Florida corporation. Montes is alleged to be a party to the contractual and business relationship that was allegedly interfered with by the Defendants, i. e., the Montes/Charly Agreement. Montes alleges that his property (the Florida Association), and the assets of the Florida Association which he owned (the Masters), were converted, and that these were located in Florida at the time of the conversion. As to the defamation claims, each of the alleged Defamatory Statements relate to or involve Montes and/or the Florida Association, and Montes alleges that the statements were received by "Plaintiff and other residents of the State of Florida, in Miami-Dade County," although Montes does not specifically identify who the third parties in Florida are. Complaint, ¶ 73. Thus, with respect to each of the tort counts, Montes alleges injury to himself personally (to his business reputation) and to his corporation (loss of goodwill) in Florida.
As to the remaining counts, state and federal courts in this district have found that in defamation cases, personal jurisdiction may be exercised under the Florida long-arm statute over nonresident defendants where the alleged defamatory statements are received in this state. Courts have also found in conversion cases that personal jurisdiction may be exercised in Florida under Section 48.193(1)(b) where the conversion allegedly occurs in Florida, i.e., the property converted was allegedly in Florida at the time of the conversion. And, in tortious interference cases, courts have similarly found that personal jurisdiction may be exercised under subsection (1)(b) where the injury from the interference is felt by a Florida resident.
See e.g., Kelly v. Kelly, 911 F. Supp. 518, 522-23 (M.D. Fla. 1995) (in order to satisfy Section 48.193(1)(b), plaintiff alleging defamation must allege that defendants published defamatory remarks to third parties in Florida); Achievers Unlimited, Inc. v. Nutri Herb, Inc., 710 So.2d 716, 718 (Fla. 4th DCA 1998) (finding that in a Florida company's action against a nonresident former distributor for defamation, the plaintiff company sufficiently pled unrefuted jurisdictional facts to bring the non-resident defendant within Section 48.193(1)(b) by alleging that the defendant made the allegedly defamatory statements to plaintiff's current distributors in Florida and elsewhere, even though plaintiff did not specifically identify the distributors in Florida who received the statements).
See e.g., Future Technology Today, Inc. v. OSF Healthcare Systems, 109 F. Supp.2d 1278, 1282 (S.D. Fla. 1999) (finding that where plaintiff, a Florida corporation, alleged conversion of property located in Florida, and there was dispute in the record as to whether it was actually plaintiff's property, the Court would construe all facts in the light most favorable to the plaintiff and hold that the alleged conversion satisfies Section 48.193(1)(b)); Merkin v. PCA Healthcare Plans of Florida, Inc., 2003 WL 21919340, *2 (Fla. 3d DCA 2003) (holding that as to the tort of conversion, the act that must allegedly occur in Florida in order for a Florida court to exercise long-arm jurisdiction is the defendant's exercise of wrongful dominion and control over the property to the detriment of the rights of its actual owner) (citing Envases Venezolanos, S.A. v. Collazo, 559 So.2d 651, 652 (Fla. 3d DCA 1990) (citations omitted).
See e.g., Posner, 178 F.3d at 1216 (finding that injury caused by the defendant's alleged tortious interference with contract occurred in Florida because plaintiff's property covered by the insurance policies and the plaintiff were in Florida).
Accordingly, under Eleventh Circuit precedent, Montes alleges sufficient facts to satisfy subsection (1)(b) of the Florida long-arm statute. Defendants have not rebutted Montes' allegations that he is a Florida resident, and that the Florida Association is a Florida corporation. Instead, Defendants' declarations are that Defendants did not commit tortious acts within Florida, which are insufficient to shift to Montes the burden of producing evidence to support jurisdiction. See Posner, 178 F.3d at 1215 (finding that "conclusory assertions of ultimate fact are insufficient to shift to the plaintiff's the burden of producing evidence supporting jurisdiction").
2. This Court's Assertion of Jurisdiction Over Defendants Would Offend Due Process and Traditional Notions of Fair Play and Substantial Justice
a. No Defendant Has "Minimum Contacts" With Florida
The next consideration in the jurisdictional analysis is whether sufficient minimum contacts exist. In examining a defendant's minimum contacts with the forum, courts apply three criteria:
First, the contacts must be related to the plaintiff's cause of action or have given rise to it. Second, the contacts must involve some purposeful availment of the privilege of conducting activities within the forum, thereby involving the benefits and protections of its laws. Finally, the Defendant's contacts within the forum state mist be such that [it] should reasonably anticipate being haled into court here.Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d at 631. The allegations and evidence regarding each of the Defendants' insubstantial contacts with Florida will now be addressed in turn.
It is alleged in the Complaint that the KKK Firm is a California law partnership, with its principal place of business in Beverly Hills, California. Complaint, ¶ 5. It is further alleged that individual Defendants, Kaplan, Kenegos and Kadin, are residents of the State of California and attorneys practicing at the KKK Firm. Complaint, ¶¶ 6-8. The KKK Firm Defendants have submitted declarations under penalty of perjury showing the following: (1) Kaplan, Kenegos and Kadin are indeed residents of California; (2) the KKK Firm is a law partnership organized under California law; (3) the individual KKK Firm Defendants and the KKK Firm have not practiced law in Florida or established subsidiaries to do business in Florida; (4) neither the individual KKK Firm Defendants nor the KKK Firm has ever had a place of business in Florida or any offices or agents in Florida; (5) neither the individual KKK Firm Defendants nor the KKK Firm has ever had a telephone listing, mailing address, or bank account in Florida; (6) neither the individual KKK Firm Defendants nor the KKK Finn has ever owned any tangible or real property in Florida; and (7) neither the individual KKK Firm Defendants nor the KKK Firm has ever directed any activities toward residents of Florida or otherwise established contacts with Florida. See generally Declaration of Jerry Kaplan; Declaration of Joan Kenegos; Declaration of David Scott Kadin.
The Complaint alleges that Brembry, Peterson and Spruell are residents of the State of California and individuals transacting business in California on behalf of the California Association, and also doing business in Miami-Dade County, Florida, through FMM. Complaint, ¶¶ 12-14. Brembry, Peterson and Spruell have responded to Montes' allegations by declaring under penalty of perjury that they: (1) are California residents that collectively own FMM and the California Association; (2) do not have a mailing address, bank account, or telephone number in Florida; (3) do not have offices or agents in Florida; (4) have never owned tangible or real property in Florida; (5) have never held meetings in Florida or attended business conferences or similar business functions in Florida on behalf of FMM or the California Association; (6) have never conducted business in Florida individually, or on behalf of FMM or the California Association; (7) have never directed any activities toward residents of Florida or otherwise established contacts with Florida; and (8) have not made or published any defamatory statements to any individuals in Florida. See generally Declaration of Ron Brembry ("Brembry Dec1."); Declaration of Bruce Peterson ("Peterson Decl."); Declaration of Ramond Spruell ("Spruell Decl.").
It is alleged that Defendant, the California Association, is a California Fictitious Business Name entity, with its principal place of business in Beverly Hills, California. Complaint, ¶ 10. There is evidence in the record showing that the California Association: (1) has not conducted business in Florida; (2) does not have a principal place of business or subsidiaries in Florida; (3) does not have offices or agents in Florida; (4) has never held meetings in Florida or attended business conferences or similar functions within Florida; (5) does not have a telephone listing, bank account or mailing address in Florida; and (6) does not own tangible or real property in Florida. See generally Spruell Decl.
FMM is alleged to be a California limited liability company doing business in Miami-Dade County, Florida. Complaint, ¶ 11. FMM has presented evidence showing that FMM: (1) is not incorporated in Florida, nor is it qualified to do business in Florida; (2) has no subsidiaries doing business in Florida and does not have a principal place of business in Florida; (3) does not have any offices or agents in Florida and does not, nor has it ever, conducted any business in Florida; (4) does not have a telephone listing, bank account or mailing address in Florida; (5) does not own tangible or real property in Florida; (6) does not advertise or direct any of its advertising specifically toward Florida residents, and does not advertise in any publications that are directed primarily to Florida residents; and (7) does not otherwise direct any activities toward residents of Florida See generally Brembry Decl.; Peterson Decl.; Spruell Decl.
Thus, the evidence submitted by the Defendants demonstrates that they do not and have never operated, conducted, engaged in, or carried on any business or business venture in Florida. They are not licensed, registered or otherwise qualified to do business in Florida. Indeed, Defendants have submitted declarations under penalty of perjury to support that they have absolutely no contacts with Florida.
Montes has failed to rebut Defendants' declarations with his own affidavits, declarations, documents or testimony. Montes does not allege that Defendants purposefully availed themselves of any opportunity or activity in Florida. He does not allege that Defendants entered into a contract in Florida, attended meetings in Florida or used wire communications to talk to persons in Florida. He also fails to allege that he personally had any involvement with Defendants in Florida. Instead, Montes merely contends that Defendants are subject to personal jurisdiction in Florida because (1) the ICKX Firm Defendants have falsely claimed to represent the Florida Association as its counsel to third parties and in legal proceedings; and (2) that in communications with third parties and in legal proceedings Brembry, Peterson and Spruell have falsely claimed to own the Florida Association. Montes also alleges that all Defendants are jointly liable for the aforementioned conduct because each of the Defendants "was the agent, servant, officer of employee of each of the other defendants." Complaint, ¶ 30. Moreover, Montes alleges that FMM and the California Association are liable for the conduct of Brembry, Peterson and Spruell because
there exists . . . a unity of interest and ownership between Defendants Fictitious Association [the California Association] and FMM and Brembry, Peterson and Spruell, individually, such that any individuality and separateness between Defendants Fictitious Association and FMM and Brembry, Peterson and Spruell has ceased and Fictitious Association and FMM are the alter egos of Brembry, Peterson and Spruell.
Complaint, ¶ 16 (emphasis added).
Montes' attempted agency and alter ego allegations fail because none of the Defendants has contacts with Florida.
Montes' allegations regarding Defendants' misrepresentations relating to the KKK Finn's legal representation of the Florida Association, and Brembry, Peterson and Spruell's ownership of the Florida Association, may not be used to establish minimum contacts for several reasons. First, Montes denies that the KKJC Firm actually represented the interests of the Florida Association, and he denies that Brembry, Peterson and Spruell have ever owned this Florida company. Montes alleges that he is and has been the only true owner of the Florida Association, and that the KKK Firm never received permission from him to represent the Florida Association as its counsel. Montes' allegations in the Complaint must be accepted as true for purposes of this motion to dismiss, unless they are controverted by Defendants' evidence. Defendants have not submitted evidence in this case to contradict that Montes owns the Florida Association and that the Florida Association never retained the KKK Firm. Thus, neither Brembry, Peterson and Spruell's unsubstantiated claims of ownership of the Florida Association, nor the KKK Firms' unsubstantiated claims that they had authority to represent the Florida Association's interest, may be used to establish minimum contacts with Florida. The ownership of the Florida Association is one of the issues that will have to be ultimately resolved in this litigation, but such determination is not proper on a motion to dismiss.
Defendants simply do not have continuous and systematic contacts with Florida. They have not purposely availed themselves of the benefits offered by the state of Florida. Montes' causes of action, therefore, could not have arisen from any activities of the Defendants in Florida. And, since they do not do business in Florida and have not had contacts with Florida, Defendants could not reasonably have anticipated being haled into court in Florida. Thus, due process compels a refusal to exercise personal jurisdiction over Defendants.
b. Traditional Notions of Fair Play and Substantial Justice Require this Court to Decline to Exercise Personal Jurisdiction Over Defendants
Even if Montes could demonstrate the kind of "continuous and systematic" contacts required to satisfy due process, the exercise of personal jurisdiction over Defendants would still be unconstitutional as offensive to "traditional notions of fair play and substantial justice." In determining whether the exercise of personal jurisdiction over the Defendants would comport with traditional notions of fair play and substantial justice, the court should examine: (a) the burden on the Defendants; (b) the interest of the forum state in adjudicating the dispute; (c) Monies' interest in obtaining convenient and effective relief; (d) the interest of the interstate judicial system in obtaining the most efficient resolution of controversies; and (e) the shared interest of the several states in furthering fundamental substantive social policies. See Future Technology, 218 F.3d at 1251 (citing Burger King v. Rudzewicz, 471 U.S. 462, 466 (1985) (quoting World-Wide Volkswagen v. Woodson, 444 U.S. 286, 292(1980)).
These factors weigh against the exercise of personal jurisdiction over Defendants in this case. First, the litigation of this dispute in Florida would be a substantial burden on Defendants, all of whom are California residents. Defendants would be forced to defend this litigation in a forum in which there are few witnesses and in which there is little or no evidence. In addition, the assertion of personal jurisdiction here would undermine judicial efficiency. The California state and federal courts have already heard related disputes between the same parties. Discovery of witnesses and documents in this case has already been conducted in California and should not have to go forward in another forum. No substantive social policy of Florida is implicated in this case. In sum, an exercise of jurisdiction over Defendants in Florida would result in a due process violation as well as a violation of traditional notions of fair play and substantial justice. None of the California-based Defendants could have had a reasonable expectation of being haled into a Florida court to answer to the claims of a Florida resident.
B. Florida is an Improper Venue; Transfer to the Central District of California is Appropriate Under 28 U.S.C. § 1406(a)
As an alternative to dismissal based on lack of personal jurisdiction, Defendants seek transfer of this action, pursuant to 28 U.S.C. § 1406 or 28 U.S.C. § 1404, to the Central District of California. Although Defendants are entitled to dismissal for lack of personal jurisdiction, the undersigned finds transferring this case to California is in the interest of justice.
Defendants argue in support of transfer that their burden in defending this matter in Florida would be great because, as already noted, all of the Defendants are based in California, the overwhelming majority of witnesses and documentary evidence are in California, and Montes has already brought two California lawsuits seeking a determination of ownership of the Masters. Because of the prior suits in California, Defendants argue that the most efficient judicial resolution of this matter would result from adjudication in California. The undersigned agrees.
Under 28 U.S.C. § 1406(a), a "district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought." 28 U.S.C. § 1406(a). The statute that determines the district(s) or division(s) in which an action could have been brought is 28 U.S.C § 1391, which provides, in relevant part:
A civil action wherein jurisdiction is founded only on diversity of citizenship may, except as otherwise provided by law, be brought only in (1) a judicial district where any defendant resides, if all defendants reside in the same State, (2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of the property that is the subject of the action is situated, or (3) a judicial district in which any defendant is subject to personal jurisdiction at the time the action is commenced, if there is no district in which the action may otherwise be brought.28U.S.C. § 1391(a).
In this case, none of the Defendants resides in Florida, and none is subject to personal jurisdiction here. On the other hand, all Defendants are residents of California and are thus subject to service of process and personal jurisdiction in that forum. California, therefore, is a district in which this action could have been brought pursuant to 28 U.S.C. § 1391. Unlike the Southern District of Florida, the California courts have personal jurisdiction over all named Defendants and thereby have the power to render a judgment. It can also be gleaned from the evidence that California is the district in which "a substantial part of the events or omissions giving rise to the claims occurred" because the settlement and assignment agreements transferring rights to the Masters were entered into in California and Defendants claim to have bought the Masters at a UCC collateral sale in California. Moreover, Montes concedes in the Complaint that the Masters are currently in the possession of the Defendants in California, and therefore, the property that is the subject of the action is situated in California. Complaint, ¶ 67.
Because neither jurisdiction nor venue properly lies in this forum, the Court, in the interest of justice, finds that transfer pursuant to 28 U.S.C. § 1406(a) is appropriate. See Cauff Lippman Co. v. The Apogee Finance Group, Inc. et al., 745 F. Supp. 678, 682 (S.D. Fla. 1990) (finding that transferring action under Section 1406(a) was a more appropriate alternative to dismissing action, upon determining that personal jurisdiction could not be exercised over out-of-state defendants, where process was served and preliminary discovery was accomplished, so that dismissal would lead only to the unnecessary duplication of fees and costs). See also Goldlawr, Inc. v. Heiman, 369 US. 463, 466 (1962) (finding that Section 1406(a) authorizes transfer of cases "whether the court in which it was filed had personal jurisdiction over the defendants or not").
For all the foregoing reasons, it is
ORDERED AND ADJUDGED as follows
1. Defendants' Motion to Dismiss for Lack of Personal Jurisdiction Pursuant to F.R.C.P. 12(b)(2), or in the Alternative to Dismiss or Transfer for Improper Venue ( 28 U.S.C. § 1406(a)), or in the Alternative, to Transfer for Convenience ( 28 U.S.C. § 1404(a)) (D.E. 8) is GRANTED in part.
2. This cause is TRANSFERRED, pursuant to 28 U.S.C. § 1406(a), to the United States District Court for the Central District of California. The Clerk of Court shall forthwith TRANSMIT this cause and all the records pertaining thereto to the Clerk of Court of the Central District of California.
3. All other pending motions before this Court are DENIED as moot.