Opinion
CASE NO. 22-80369-CV-MIDDLEBROOKS
2022-11-21
Kelly STONE, Richard Butler, and DermaCare Packaging & Private Label, LLC, Plaintiffs, v. Omri SHAFRAN, Dimitri Menin, and, Texas Medical Technology, LLC, Defendants.
Benjamin L. England, Hannah Kreinik, Pro Hac Vice, Jessica Rifkin, Pro Hac Vice, Joseph Andrew Harrison, Pro Hac Vice, Jennifer Gross, Pro Hac Vice, Benjamin L. England & Associates, LLC, Glen Burnie, MD, Denise Calle, Ben England and Associates, Glen Burnie, MD, for Plaintiff Kelly Stone. Benjamin L. England, Hannah Kreinik, Pro Hac Vice, Jessica Rifkin, Pro Hac Vice, Joseph Andrew Harrison, Pro Hac Vice, Jennifer Gross, Pro Hac Vice, Benjamin L. England & Associates, LLC, Glen Burnie, MD, Denise Calle, Ben England and Associates, Glen Burnie, MD, Stuart N. Kaplan, The Law Offices of Stuart N. Kaplan, P.A., Palm Beach Gardens, FL, for Plaintiffs Richard Butler, DermaCare Packaging & Private Label, LLC. Andrew R. Schindler, Ari Chaim Shapiro, Gordon Rees Scully Mansukhani, Miami, FL, for Defendants Omri Safran, Texas Medical Technology, LLC. Andrew R. Schindler, Gordon Rees Scully Mansukhani, Miami, FL, for Defendant Dimitri Menin.
Benjamin L. England, Hannah Kreinik, Pro Hac Vice, Jessica Rifkin, Pro Hac Vice, Joseph Andrew Harrison, Pro Hac Vice, Jennifer Gross, Pro Hac Vice, Benjamin L. England & Associates, LLC, Glen Burnie, MD, Denise Calle, Ben England and Associates, Glen Burnie, MD, for Plaintiff Kelly Stone. Benjamin L. England, Hannah Kreinik, Pro Hac Vice, Jessica Rifkin, Pro Hac Vice, Joseph Andrew Harrison, Pro Hac Vice, Jennifer Gross, Pro Hac Vice, Benjamin L. England & Associates, LLC, Glen Burnie, MD, Denise Calle, Ben England and Associates, Glen Burnie, MD, Stuart N. Kaplan, The Law Offices of Stuart N. Kaplan, P.A., Palm Beach Gardens, FL, for Plaintiffs Richard Butler, DermaCare Packaging & Private Label, LLC. Andrew R. Schindler, Ari Chaim Shapiro, Gordon Rees Scully Mansukhani, Miami, FL, for Defendants Omri Safran, Texas Medical Technology, LLC. Andrew R. Schindler, Gordon Rees Scully Mansukhani, Miami, FL, for Defendant Dimitri Menin. ORDER ON MOTION TO DISMISS DONALD M. MIDDLEBROOKS, UNITED STATES DISTRICT JUDGE
THIS CAUSE comes before the Court on Defendants' Motion to Dismiss ("Motion"), filed December 29, 2020. (DE 52). The Motion is fully briefed. (DE 55; DE 62). For the following reasons, the Motion is granted in part and denied in part.
BACKGROUND
Plaintiffs bring this five-count lawsuit against Defendants for alleged defamation, business disparagement, violation of the Lanham Act, violation of the Florida Deceptive and Unfair Trade Practices Act ("FDUPTA"), and tortious interference with business relationships. (DE 43 at 1). Plaintiff DermaCare Packing & Private Label, LLC ("DermaCare") is a Florida company with its principal place of business in Florida. (Id. ¶ 1). DermaCare is an authorized distributor for ACON Labs, Inc. ("Acon") of "Flowflex™ COVID-10 Antigen Home Tests" ("COVID-19 Tests" or "Tests"). Plaintiffs Kelley Stone and Richard Butler ("Individual Plaintiffs") are residents of Florida and employees/director of DermaCare. (Id. ¶ 2). Defendant Texas Medical Technology, LLC ("TMT") is a Texas company with its principal place of business in Texas. (Id. ¶ 4). As is relevant here, TMT would sell COVID-19 tests directly to customers. Defendants Omri Shafran, CEO of TMT, and Dimitri Menin, President of TMT, are residents of Texas. (Id. ¶¶ 5-6).
The facts herein are taken from Plaintiffs' Amended Complaint. (DE 43).
At times, the Parties switch "Demitri Menin" for "Menin Dimitri." I follow an affidavit wherein he identifies himself as "Demitri Menin." (DE 52-1).
Under Acon and DermaCare's agreement, Acon would not begin manufacturing COVID-19 Tests without prepayment. In December 2021, Acon informed DermaCare that the estimated time to complete an order would be 2-4 weeks. (Id. ¶ 21). By this time, TMT had placed its first order with DermaCare. On January 4, 2022, that range grew to 4-6 weeks. The following day, that range grew even longer, this time to 6-8 weeks. In turn, DermaCare kept TMT abreast of the changes. (Id. ¶ 22).
TMT placed its first order with DermaCare in late December 2021. (Id. ¶ 24). That order was filled on time. TMT placed additional orders on December 30, 2021, under the 4-6-week lead time. (Id. ¶ 25). Henya (Hannah) Hertzel is TMT's agent in Florida and is said to have placed TMT's orders or managed their progression. (Id. ¶ 12). On January 5, 2022, Plaintiff Stone informed TMT of the then-changed 4-6-week lead time. Given the increasingly long wait times, DermaCare offered to cancel TMT's orders. (Id. ¶ 23). TMT declined that offer. TMT placed several more orders during January 4-26, 2022. (Id. ¶ 27). In placing these orders, TMT wired DermaCare close to $300,000 in January. (Id. ¶ 28). In the end, Plaintiffs delivered TMT's orders in the order that they were received from Acon. (Id. ¶ 31).
Defendants' dispute that Ms. Hertzel is their agent. I discuss this further below.
TMT apparently became frustrated with the longer and longer wait times for order fulfillment. On February 2, 2022, Plaintiffs learned of Defendants' "defamation campaign." (Id. ¶ 29). Defendant Shafran cc'd the Individual Plaintiffs on emails to the major media outlets, including the Miami Herald; the FBI Miami Field Office; Chinese diplomats to the U.S. Department of Trade; and DermaCare's business partners. (Id. ¶ 29). Defendants also filed complaints with the California and Florida Attorneys General offices.
Defendants' alleged defamatory statements are numerous and wide-ranging. When relevant to my discussion below, I enter into more detail. The underlying accusations leveled by Defendants against Plaintiffs was that they intentionally held out on delivering the COVID-19 Tests and in turn stole TMT's money (and that of their individual customers). (Id. ¶ 32). Defendants made these allegedly defamatory accusations in three ways: (1) by sending a series of emails, as noted above, from Defendant Shafran; (2) filing complaints with the California and Florida Attorneys General offices; and (3) publishing an article titled, "2022 Bonnie and Clyde - Rich Butler and Kelley Stone - DermaCare" ("Article"). (Id. ¶ 42).
Defendants deny any involvement in the creation or publication of this Article; more on this below.
The FBI Miami Field Office and Florida Attorney General's Office ("Florida AG") acknowledged receipt of the defamatory emails. (Id. ¶ 14). The Florida AG investigated DermaCare, requiring DermaCare to hire legal counsel to represent them in a meeting. (Id. ¶ 68). The Florida AG dropped its investigation following the meeting.
The Article accuses Plaintiffs Butler and Stone of jointly committing fraud and paints them as a couple (they are not) in crime—akin to Bonnie and Clyde. The Article contains an underlying image of Plaintiff Stone with her husband, but instead has Plaintiff Butler's face cropped in to make it appear as if they are indeed a couple. (Id. ¶ 44). Plaintiff Stone's daughter is said to have inadvertently accessed this article during her elementary school class wherein the children were learning to use the internet, prompting a series of uncomfortable questions. Sometime after the Article's publication, Defendant Menin reshared it on LinkedIn and made several allegedly defamatory comments therein. (Id. ¶ 51).
On March 9, 2022, Plaintiffs filed suit. (DE 1). On June 2, 2022, Plaintiffs filed an Amended Complaint. (DE 43). One June 15, 2022, Defendants filed a Motion to Dismiss for Lack of Personal Jurisdiction and in the Alternative for Failure to State a Claim. (DE 52).
LEGAL STANDARD
Rule 12(b)(2) allows for dismissal of a claim when the court lacks personal jurisdiction over a defendant. See Fed. R. Civ. P. 12(b)(2). The plaintiff "has the burden of establishing a prima facie case of personal jurisdiction." Stubbs v. Wyndham Nassau Resort & Crystal Palace Casino, 447 F.3d 1357, 1360 (11th Cir. 2006) (citing Meier ex rel. Meier v. Sun Int'l Hotels, Ltd., 288 F.3d 1264, 1268-69 (11th Cir. 2002)). "A prima facie case is established if the plaintiff presents enough evidence to withstand a motion for directed verdict." Id. (quoting Meier, 288 F.3d at 1269).
"A plaintiff seeking to establish personal jurisdiction over a nonresident defendant 'bears the initial burden of alleging in the complaint sufficient facts to make out a prima facie case of jurisdiction.' " Louis Vuitton Malletier, S.A. v. Mosseri, 736 F.3d 1339, 1350 (11th Cir. 2013) (citing United Techs. Corp. v. Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009)). "Where . . . the defendant submits affidavits contrary to the allegations in the complaint, the burden shifts back to the plaintiff to produce evidence supporting personal jurisdiction, unless the defendant's affidavits contain only conclusory assertions that the defendant is not subject to jurisdiction." Stubbs, 447 F.3d at 1360 (quoting Meier, 288 F.3d at 1269). "Where [the plaintiff's] complaint and supporting affidavits and documents conflict with the [d]efendant['s] affidavits, we must construe all reasonable inferences in favor of the plaintiff . . . ." Id. (quoting Meier, 288 F.3d at 1269).
Rule 12(b)(6) allows for dismissal of a claim for failure to state a claim. See Fed. R. Civ. P. 12(b)(6). A complaint "must . . . contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Am. Dental Ass'n v. Cigna Corp., 605 F.3d 1283, 1289 (11th Cir. 2010) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). "Dismissal is therefore permitted when on the basis of a dispositive issue of law, no construction of the factual allegations will support the cause of action." Glover v. Liggett Grp., Inc., 459 F.3d 1304, 1308 (11th Cir. 2006) (internal quotations omitted). Moreover, I must construe the complaint in the light most favorable to the plaintiff and assume the truth of the plaintiff's factual allegations. See Erickson v. Pardus, 551 U.S. 89, 93, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007); Christopher v. Harbury, 536 U.S. 403, 406, 122 S.Ct. 2179, 153 L.Ed.2d 413 (2002); Brooks v. Blue Cross & Blue Shield of Fla., Inc., 116 F.3d 1364, 1369 (11th Cir. 1997). However, pleadings that "are no more than conclusions, are not entitled to the assumption of truth." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); see also Einhorn v. Axogen, Inc., 42 F.4th 1218, 1222 (11th Cir. 2022) (stating that an unwarranted deduction of fact is not considered true for purposes of determining whether a claim is legally sufficient). "Factual allegations must be enough to raise [the plaintiff's] right to relief above the speculative level." Id.
DISCUSSION
Defendants first move, under Rule 12(b)(2), to dismiss for lack of personal jurisdiction as to all counts in the First Amended Complaint ("FAC"). In the alternative, Defendants argue that Counts I (Lanham Act), II (FDUPTA), and V (Interference with Business Relationship) should be dismissed for failure to state a claim under Rule 12(b)(6). Defendants do not challenge Counts III (Business Disparagement) and IV (Defamation Per Se) under Rule 12(b)(6), only under Rule 12(b)(2). Lastly, Defendants argue that the FAC should be dismissed because it is shotgun pleading.
In Part I, I dismiss without prejudice all potential claims against Defendant Menin. In Part II, I find that this Court has personal jurisdiction over Defendants Shafran and TMT as to all claims by Individual Plaintiffs. In Part III, I find that this Court has personal jurisdiction over Defendants Shafran and TMT as to all claims by Plaintiff DermaCare. And in Part IV, I dismiss with prejudice Plaintiffs' (Individuals and DermaCare) claims under Counts I, III, and V for violating the Single Action Rule.
I. Shotgun Pleading - All Potential Claims Against Defendant Menin
Defendants argue that Plaintiff's FAC should be dismissed because it is shotgun pleading. (DE 52 at 26).
The Eleventh Circuit has generally identified four categories of shotgun pleadings: (1) one "containing multiple counts where each count adopts the allegations of all preceding counts, causing each successive count to carry all that came before and the last count to be a combination of the entire complaint[;]" (2) one that is "replete with conclusory, vague, and immaterial facts not obviously connected to any particular cause of action[;]" (3) "one that . . . [does] not separat[e] into a different count each cause of action or claim for relief[;]" and (4) one that "assert[s] multiple claims against multiple defendants without specifying which of the defendants are responsible for which acts or omissions or which of the defendants the claim is brought against." Weiland v. Palm Beach Cnty. Sheriff's Office, 792 F.3d 1313, 1321-23 (11th Cir. 2015) (citations omitted).
I agree that Plaintiffs' FAC is a shotgun pleading for three reasons. First, each count incorporates by reference Paragraphs 7-87. (See, e.g., DE 43 at 30). Second, Plaintiffs fail to number any paragraphs after number 99, even though there are eight more pages. (Id. at 30-37). Third, and most egregious, Plaintiffs bring each count against "both Defendants" even though there are three Defendants in this case. Plaintiffs' pleading errors make it nearly impossible for the court and Defendants to determine who, allegedly, did what.
On March 9, 2022, Plaintiffs filed their Complaint against Defendants Shafran and TMT. (DE 1). On June 15, 2022, Plaintiffs filed their First Amended Complaint ("FAC"). The FAC added Defendant Dimitri Menin.
Notwithstanding Plaintiffs' shotgun pleading, I will analyze claims brought against Defendants Shafran and TMT, but not Menin. I do this for two reasons. First, it is clear that Plaintiffs intend to bring all counts against Defendants Shafran and TMT. The Complaint brought all counts against "both defendants," when the only Defendants were Shafran and TMT. The FAC added Defendant Menin. In the FAC, Plaintiffs' only allegation as to Defendant Menin is that he reposted the Article on LinkedIn along with making additional defamatory statements within that post. (DE 43 ¶ 51-53). Given how little Plaintiffs allege of Defendant Menin, it is clear that when they state, "both Defendants," they at least include Defendants Shafran and TMT. Indeed, as alleged, Defendant Shafran (acting through TMT) is the source of nearly all the defamatory statements. It is not possible to tell, however, which claims Plaintiffs bring against Defendant Menin.
Second, withholding a ruling altogether to allow Plaintiffs to cure their shotgun pleading would be highly inefficient considering the current schedule of this case. Such a ruling would necessarily require updated briefing to align with numbered paragraphs, which would take weeks. Defendants filed this Motion on June 15, 2022. Trial is set for December 5, 2022. (DE 20). On October 4, 2022, I stayed the dispositive motions deadline of October 6, 2022, to avoid any overlap with this Motion. (DE 63). Moreover, the Parties represent that, "although the Parties hope this matter can be settled, the uncertainty over the resolution of [this Motion] is a barrier to settlement." (DE 65 at 1).
Thus, rather than delay this case any further I will rule on the issues that are clearly before me—all claims brought against Defendants Shafran and TMT. To that end, I will dismiss without prejudice any claims Plaintiffs intended to bring against Defendant Menin. I will also limit my discussion under Parts II, III, and IV to claims made against Defendants Shafran and TMT.
Hereinafter, when I refer to "Defendants" I am referring only to Shafran and TMT, not Menin. When I intend to include Defendant Menin, I will make that clear.
II. Individual Plaintiffs v. Defendants Shafran and TMT
Plaintiffs Stone and Butler bring claims for Defamation Per Se (Count IV) and Interference with Business Relationship (Count V). Defendants move to dismiss for lack of personal jurisdiction. I find that this Court can exercise personal jurisdiction over Defendants under Fla. Stat. § 48.193(1)(a)(1), but not § 48.193(1)(a)(2). Since Plaintiffs must only establish a single proper basis for personal jurisdiction this distinction does not matter. I address Defendants' Rule 12(b)(6) challenge as to Count V in Part IV.
What follows is an analysis of the personal jurisdiction issue as it pertains to the Individual Plaintiffs' claims under Count IV against Defendants. As I will explain in Part IV, the facts underlying the Individual Plaintiffs' claims under Count IV are the same as under Count V. Thus, this personal jurisdiction analysis applies equally to Count V. Moreover, much of the preliminary analysis will also apply to Plaintiff DermaCare's claims.
A. Personal Jurisdiction
"A federal court sitting in diversity undertakes a two-step inquiry in determining whether personal jurisdiction exists: the exercise of jurisdiction must (1) be appropriate under the state long-arm statute and (2) not violate the Due Process Clause of the Fourteenth Amendment to the United States Constitution." Carmouche v. Tamborlee Mgmt., Inc., 789 F.3d 1201, 1203 (11th Cir. 2015). "Only if both prongs of the analysis are satisfied may a federal or state court exercise personal jurisdiction over a nonresident defendant." Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir. 1990) (citations omitted).
"If there is a basis for the assertion of personal jurisdiction under the state statute, we next determine whether sufficient minimum contacts exist to satisfy the Due Process Clause of the Fourteenth Amendment so that 'maintenance of the suit does not offend traditional notions of fair play and substantial justice.' " Madara, 916 F.2d at 1514 (citing Int'l Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945)) (additional citations omitted).
1. Florida's Long-Arm Statute
Under Florida's long-arm statute, specific jurisdiction can only be exercised over a defendant in causes of action that "aris[e] from" a list of enumerated acts. § 48.193(1)(a). Here, Plaintiffs allege that this Court has personal jurisdiction over Defendants pursuant to Sections 48.193(1)(a)(1)-(2) of Florida's long-arm statute. (DE 43 ¶ 11, 14). Section 48.193(1)(a)(1) provides in relevant part that a non-resident becomes subject to the personal jurisdiction of Florida's courts by, "personally or through an agent . . . operating, conducting, engaging in, or carrying on a business or business venture in this state or having an office or agency in this state." Fla. Stat. § 48.193(1)(a)(1). Section 48.193(1)(a)(2) provides the same in relevant part by "[c]omitting a tortious act within the state." Fla. Stat. § 48.193(1)(a)(2). I will begin with the latter section, committing a tortious act within the state.
i. Fla. Stat § 48.193(1)(a)(2)
"In Florida, before a court addresses the question of whether specific jurisdiction exists under [Fla. Stat. § 48.193(1)(a)(2)], the court must determine 'whether the allegations of the complaint state a cause of action.' " PVC Windoors, Inc. v. Babbitbay Beach Const., N.V., 598 F.3d 802, 808 (11th Cir. 2010) (quoting Wendt v. Horowitz, 822 So.2d 1252, 1260 (Fla. 2002)). The same is not true for determining jurisdiction under Fla. Stat. § 48.193(1)(a)(1). Thus, if the basis for long-arm jurisdiction is "doing business in Florida," then the court does not have to first determine sufficiency of the complaint. See 8100 R.R. Ave. Realty Tr. v. R. W. Tansill Const. Co., 638 So. 2d 149 (Fla. Dist. Ct. App. 1994).
As is relevant to establishing personal jurisdiction under Fla. Stat. § 48.193(1)(a)(2), I find—as Defendants do not contest—that Plaintiffs plead sufficient facts to state valid claims for defamation as it pertains to the Article under Counts III and IV. The elements for defamation are: (1) publication; (2) falsity; (3) [Defendants acted] . . . negligently on a matter concerning a private person; (4) actual damages; and (5) statement must be defamatory. Jews For Jesus, Inc. v. Rapp, 997 So. 2d 1098, 1106 (Fla. 2008). A statement is defamation per se, "when considered alone without innuendo: (1) it charges that a person has committed an infamous crime; (2) it charges a person with having an infectious disease; (3) it tends to subject one to hatred, distrust, ridicule, contempt, or disgrace; or (4) it tends to injure one in his trade or profession." Richard v. Gray, 62 So. 2d 597, 598 (Fla. 1953).
A business entity may be liable for the defamatory statements of its agents. See Baker v. Atl. Coast Line R. Co., 141 Fla. 184, 192 So. 606, 606-07 (1939). Considering the facts plead, Defendants' non-opposition, and the law in Florida, I find that the Individual and business entity Plaintiffs plead sufficient facts to state a claim for defamation/business disparagement against Defendants Shafran and TMT.
Having found, as a threshold matter, that Plaintiffs state valid claims for defamation (i.e., a tort), I turn to the question of whether the cause of action arises out of a tortious act committed within Florida. See Fla. Stat. § 48.193(1)(a)(2). In Wendt v. Horowitz, the Florida Supreme Court held:
First, in order to 'commit a tortious act' in Florida, a defendant's physical presence is not required. Second, 'committing a tortious act' in Florida under section 48.193(1)(b) can occur through the nonresident defendant's telephonic, electronic, or written communications into Florida. However, the cause of action must arise from the communications.822 So.2d 1252, 1260 (Fla. 2002). Building on Wendt, the Court held that:
[A]llegedly 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 . . . . 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.Internet Sols. Corp. v. Marshall, 39 So. 3d 1201, 1214-15 (Fla. 2010).
Here, Plaintiffs allege that Defendants (1) published the defamatory Article in Florida (DE 55 ¶¶ 41-50), (2) sent numerous defamatory emails into Florida (Id. ¶¶ 54-60), and (3) made false claims to various law enforcement authorities in Florida (Id. ¶¶ 61-70). I will discuss each in turn.
Plaintiffs cite other allegedly defamatory statements in their FAC but in responding to the motion to dismiss, Plaintiffs appear to concede that those statements were not made to people in Florida. (DE 55 at 9-12) (listing alleged defamatory statements sent into Florida). As noted in Part I, Plaintiffs incorporate by reference large portions of its FAC as to each count. This makes it difficult to discern what is being alleged. Thus, I limit this personal jurisdiction analysis as to the alleged statements contested in Plaintiffs' Response. (See Id. at 9-12, 14). Moreover, as far as I could tell, the Article is the only defamatory statement that mentions the Individual Plaintiffs (Stone and Butler); the rest are against Plaintiff DermaCare.
As to the Article, Defendants initially argue that Plaintiffs put forth no evidence that the Article was accessed (i.e., published) by a third party in Florida. (DE 52 at 10). Plaintiffs convincingly rebut that argument by providing several affidavits from third parties that say they viewed the Article in Florida before the initiation of this lawsuit. (See, e.g., DE 59-4). Defendants do not reply to this point and therefore I resolve the question of fact in Plaintiffs' favor. Defendant Shafran also submits an affidavit stating that he did not write or in any way contribute to the creation of the Article. (DE 52-4). Plaintiffs do not present a competing affidavit to rebut Defendant Shafran's affidavit.
Plaintiffs argue that the similarity between the statements made in the Article to those of Defendant Shafran's emails is far too great to be a coincidence. I tend to agree. But I am bound by Eleventh Circuit precedent that prohibits me from making a credibility determination in this posture. See AcryliCon USA, LLC v. Silikal GmbH, 985 F.3d 1350, 1364-65 (11th Cir. 2021) (stating that at the prima facie stage, "the district court does not weigh evidence or make credibility determinations."). Plaintiffs appear to acknowledge this constraint by requesting jurisdictional discovery and a hearing to rebut Defendants' denial. (DE 55 at 13).
I find that jurisdictional discovery is not necessary because although I find the exercise of personal jurisdiction under Fla. Stat. § 48.193(1)(a)(2) inappropriate (at least given the evidence before me), I find it appropriate under Fla. Stat. § 48.193(1)(a)(1).
ii. Fla. Stat § 48.193(1)(a)(1)
As a second basis for personal jurisdiction, Plaintiffs invoke Fla. Stat.§ 49.193(1)(a)(1). As a preliminary matter, unlike § 49.193(1)(a)(2), this Section does not require the Court to first find that Plaintiffs' claims plead sufficient facts to state a claim. See 8100 R.R. Ave. Realty Tr., 638 So. 2d at 149. Defendants also do not bring a Rule 12(b)(6) challenge against Individual Plaintiffs' Defamation Per Se claims under Count IV. In addition, and most importantly, Defendants' Affidavits disputing their involvement in the Article are not relevant to a § 49.193(1)(a)(1) analysis. That is because § 49.193(1)(a)(1) is concerned with Defendants' business contacts with Florida and any cause of action that arise from those contacts. Moreover, I must construe the facts and all reasonable inferences therefrom in favor of Plaintiff at the motion to dismiss stage. Given the near-identical allegations made by Defendants in their countless emails—emails that they do not dispute sending—to those in the Article, Plaintiffs plead sufficient facts to plausibly allege that Defendants are the source of the Article. Whether Defendants have evidence to the contrary is a question of fact that may be resolved at summary judgment.
Section 49.193(1)(a)(1) provides that a person is subject to jurisdiction in Florida for any causes of action arising from "[o]perating, conducting, engaging in, or carrying on a business or business venture in this state or having an office or agency in this state." § 49.193(1)(a)(1) (emphasis added). "In order to establish that a defendant is 'carrying on business' for the purposes of the long-arm statute, the activities of the defendant must be considered collectively and show a general course of business activity in the state for pecuniary benefit." Future Tech. Today, Inc. v. OSF Healthcare Sys., 218 F.3d 1247, 1249 (11th Cir. 2000).
Factors relevant to this inquiry include: (1) "the presence and operation of an office in Florida"; (2) "the possession and maintenance of a license to do business in Florida"; (3) "the number of Florida clients served"; and (4) "the percentage of overall revenue gleaned from Florida clients." Horizon Aggressive Growth, L.P. v. Rothstein-Kass, P.A., 421 F.3d 1162, 1167 (11th Cir. 2005). A business venture, on the other hand, "can consist of a single project or transaction." Atlantis Marina & Yacht Club, Inc. v. R & R Holdings, Inc., 766 So. 2d 1163, 1165 (Fla. Dist. Ct. App. 2000).
In support, Plaintiffs argue that (1) Hanna Hertzel is Defendant TMT's agent in Florida and (2) Defendant Shafran personally went to Florida to negotiate a deal with Plaintiff Butler on behalf of TMT. (DE 43 ¶¶ 11-13). As to the first, Defendants, via affidavits, respond that Ms. Hertzel is a broker (akin to a contractor) not an agent/employee of Defendant TMT. (See DE 52-3, 4). Plaintiffs rebut these affidavits with their own. Plaintiffs present a screenshot of a Hanna Hertzel's LinkedIn profile with the job title, "Director at Texas Medical Center Supply." Id. Ms. Hertzel is also shown to be an employee of "Texas Medical Technology" on the company's LinkedIn profile. Plaintiff Butler also presents an affidavit stating that he received similarly defamatory text messages from Ms. Hertzel. (DE 57-3). Finally, in Defendant Shafran's allegedly defamatory emails, he cc's Ms. Hertzel under an email with the domain "@texasmdicaltechnology," the same domain held by Defendant Shafran, the CEO of TMT. (See, e.g., DE 55-1). Plaintiffs Butler and Stone were also cc'd on those emails.
The FAC alleges that TMT was formerly known as Texas Medical Center Supply, LLC. (DE 43 ¶ 4)
Defendants' response to these rather convincing affidavits is to simply say that those were actions by the "purported agent" not the "principal" (i.e., TMT). (DE 62 at 5); see also Spence, Payne, Masington & Grossman, P.A. v. Philip M. Gerson, P.A., 483 So. 2d 775, 777 (Fla. Dist. Ct. App. 1986) (" ' "Apparent authority" ' does not arise from the subjective understanding of the person dealing with the purported agent, nor from appearances created by the purported agent himself; instead, 'apparent authority' exists only where the principal creates the appearance of an agency relationship."). Except, here, Defendants did "create the appearance of an agency relationship." As presented in Plaintiffs' rebuttal affidavits, Ms. Hertzel and TMT's LinkedIn profile directly contradicts Defendants' affidavits. Far from being her representation alone, TMT would be aware that Ms. Hertzel titled herself a "Director" of its company for anyone on the internet to see. Defendants' failure to address this discrepancy was, in my view, an affirmative acknowledgement that Ms. Hertzel was indeed acting as TMT's agent. And finally, Defendant Shafran's copying of Ms. Hertzel with a "@texasmdicaltechnology" domain on emails sent to business associates, news reporters, and Individual Plaintiffs is a clear action by the principal that creates apparent agency.
Even assuming, arguendo, that Ms. Hertzel is not TMT's agent, Defendant TMT and Shafran nonetheless carried on a "business venture" that gave rise to Individuals Plaintiffs' claims. Plaintiffs allege that Defendant Shafran went to Florida to negotiate a deal with Plaintiff Butler (acting on behalf of DermaCare). Defendants respond with an affidavit by Defendant Shafran that says he went to Florida for vacation and, "briefly met with Plaintiff Butler . . . . [but] [n]o transaction was conducted or completed at the time." (DE 52-4). Plaintiffs rebut the affidavit with two of their own: one from the general manager ("Manager") of the hotel where the meeting took place and another from Plaintiff Butler. (DE 57; DE 59-1). The Manager's affidavit states that the parties met for "at least 90 minutes" and that the purpose of the meeting was to negotiate a large purchase of COVID-19 test kits. (DE 59-1). Plaintiff Butler's affidavit states that the parties met on December 29, 2021, to negotiate the purchase of a "large number of Covid-10 Test Kits" by TMT. (DE 57). It also states that no agreement had been reached prior to that date and that TMT placed its first order the next day. Id. I construe all reasonable facts in favor of Plaintiffs.
This deal precipitated and is bound up in Defendants' "defamation campaign" (DE 43 ¶ 27) against Individual Plaintiffs. The Article would not exist if it were not for Defendants' business dealings with Individual Plaintiffs. Thus, the cause of action arises out of Defendants' contacts. Having found that the exercise of personal jurisdiction over Defendant Shafran and TMT as to the Individual Plaintiffs' claims is appropriate under Fla. Stat. § 48.193(1)(a)(1), I now address the Due Process question.
2. Due Process Clause
Courts apply a three-part due process test in evaluating whether there is specific personal jurisdiction over a defendant: "(1) whether the plaintiff's claims 'arise out of or relate to' at least one of the defendant's contacts with the forum; (2) whether the nonresident 'purposefully availed' himself of the privilege of conducting activities within the forum state, thus invoking the benefit of the forum state's law; and (3) whether the exercise of personal jurisdiction comports with 'traditional notions of fair play and substantial justice.' " Louis Vuitton, 736 F.3d at 1355. The plaintiff bears the burden of establishing the first two elements before the defendant is required to make a "compelling case" regarding the third element. Id. A primary concern of this "fairness test is the burden placed on the defendant" to defend a claim in a given forum. Oldfield v. Pueblo De Bahia Lora, S.A., 558 F.3d 1210, 1221 (11th Cir. 2009). Other factors include the forum's interest in adjudicating the dispute, the plaintiff's interest in obtaining convenient and effective relief, and the judicial system's interest in resolving the dispute. Licciardello v. Lovelady, 544 F.3d 1280, 1288 (11th Cir. 2008).
i. Relatedness
In assessing the first prong of the due process test, the Court's "inquiry must focus on the direct causal relationship between the defendant, the forum, and the litigation." Louis Vuitton, 736 F.3d at 1355-56 (quotation omitted). The Individual Plaintiffs assert that their claims are related to and caused by Defendants' business contacts with Florida. I agree.
Plaintiffs' claims arise out of defamatory statements made by Defendants in an Article published in Florida. That Article specifically mentions Individual Plaintiffs by name as owners of DermaCare. (DE 55-4). The Article also states that all the allegedly fraudulent activity occurred in Miami, Florida. Id. The defamatory statements are directly related to Plaintiffs' business dealings with Defendants. Thus, the first prong of the due process test is met because the Individual Plaintiffs' defamation claims are related to and caused by Defendants' contact with Florida.
ii. Purposeful Availment
a. Calder Effects Test
Determining whether purposeful availment has occurred in an intentional tort case implicates two tests, and if either is met, then this prong is satisfied. See Louis Vuitton, 736 F.3d at 1356. The first of these is the "Calder effects test," under which even a single tortious act by a nonresident defendant can establish purposeful availment, without regard to whether the defendant had any other contacts with the forum state, if the tort "(1) [was] intentional; (2) [was] aimed at the forum state; and (3) caused harm that the defendant should have anticipated would be suffered in the forum state." Id. (citing Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984) and Lovelady, 544 F.3d at 1285-88). The Calder effects test requires more "than the mere 'foreseeability' that an act may have effects in the forum"; rather, the defendant must " 'expressly aim' his wrongful conduct, individually targeting a known forum resident." Lovelady, 544 F.3d at 1287 (citation omitted). To satisfy the Calder effects test, "the plaintiff must have felt the brunt of the harm caused by that tort in the forum, such that the forum can be said to be the focal point of the harm suffered by the plaintiff as a result of the tort[, and] the defendant must have expressly aimed his tortious conduct at the forum, such that the forum can be said to be the focal point of the tortious activity." IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 256 (3d Cir. 1998).
Here, all three prongs of the Calder Effects Test are met. First, the defamation was intentional. Second, Defendants made defamatory statements in the Article aimed at Florida because the Article identified the fraudulent activity as occurring in Miami, Florida. (DE 55-4). And third, Defendants specifically targeted these Florida residents by making defamatory statements about them and identifying them as living in Florida and operating their business in Florida. That Defendants also made defamatory statements to people all over the United States is of no consequence.
Defendants vigorously dispute this proposition by citing to an Order, granting a motion to dismiss, that I entered in Sovereign Offshore Servs., LLC v. Shames, 2017 WL 7798664 (S.D. Fla. Aug. 3, 2017). (See DE 52 at 16). In Sovereign Offshore Servs., I held that a blog post that defamed Plaintiffs was insufficient to satisfy the minimum contacts requirement because, "Florida [was] not the 'focal point' of the posts." Id. at *4. However, in reaching that conclusion, I noted that the blog post did not (1) identify Plaintiffs as being based in Florida nor (2) identify the office location of the Florida company. Id. Here, the Article does both of those things.
b. Minimum Contacts
"Due process requires that a defendant be haled into court in a forum State based on his own affiliation with the State, not based on the 'random, fortuitous, or attenuated' contacts he makes by interacting with other persons affiliated with the state." Walden v. Fiore, 571 U.S. 277, 286, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014) (citation omitted). For a defendant to have "sufficient minimum contacts" with a forum, "the defendant's suit-related conduct must create a substantial connection with the forum State." Walden, 571 U.S. at 284, 134 S.Ct. 1115 (emphasis added). However, "[m]ere injury to a forum resident is not a sufficient connection to the forum." Id. at 289-90, 134 S.Ct. 1115.
In applying the traditional minimum contacts test for purposeful availment analysis, courts ask whether the nonresident defendant's contacts with the forum state "(1) are related to the plaintiff's cause of action; (2) involve some act by which the defendant purposefully availed himself of the privileges of doing business within the forum; and (3) are such that the defendant should reasonably anticipate being haled into court in the forum." Louis Vuitton, 736 F.3d at 1357. In performing this analysis, courts "identify all contacts between a nonresident defendant and a forum state and ask whether, individually or collectively, those contacts satisfy these criteria." Id.
First, Defendants argue that the Article cannot form the basis of the Individual Plaintiffs' claims because it is not "actionable." (DE 52 at 14). Defendants appear to implicitly concede that if the statements can form a cause of action, then Plaintiff satisfies prong one. For the reasons stated above, the Individual Plaintiffs state a valid cause of action on the basis of Defendants' statements in the Article directed at Florida. Thus, the Individual Plaintiffs' cause of action arises from Defendants' contacts with Florida.
Second, Defendants argue that prong two is not met because the Individual Plaintiffs fail to meet the Calder Effects Test. Id. For the reasons just stated, the Calder Effects Test is met. Moreover, Defendants purposefully availed themselves of the privileges of doing business within Florida. Defendant TMT had an agent in Florida, Ms. Hertzel, and Defendant Shafran negotiated a business deal with Plaintiffs in Florida.
Third, Defendants appear not to directly address the last prong, but I take their other arguments to mean that their contacts are so remote that they could not "reasonably anticipate being haled into court in [Florida]." Again, Defendant Shafran, acting on behalf of TMT, negotiated a business deal with Plaintiff Butler, the CEO of a Florida company. Defendants should have reasonably understood that any dispute arising from that deal may be adjudicated in a Florida court.
Thus, the Individual Plaintiffs meet their burden of showing that Defendant Shafran and TMT have sufficient minimum contacts with Florida.
iii. Fair Play and Substantial Justice
First, Defendants argue that because they live in Texas the burden of litigating the case here will be high. (DE 52-1; DE 52-4). I am not convinced that this factor, in this case, carries much weight. Defendant TMT already interacts with an agent, or even in Defendants' view, a broker, in Florida that is responsible for hundreds of thousands of dollars in sales. Defendant Shafran, may face a higher burden, but there is no indication that the expense of litigating a case in Florida would be unduly burdensome as compared to litigating in Texas. Second, Florida has an interest in having this dispute adjudicated here because it arises from a business dealing that occurred in Florida. Third, the Individual Plaintiffs have an interest in adjudicating this dispute in Florida because this is where the Article was published. Fourth, the judicial system has an interest in resolving the dispute in Florida given the gain in efficiency with most of the witnesses residing in Florida.
Defendants rely heavily on two district court orders to argue that a defamatory post of a company is insufficient to establish personal jurisdiction under the Due Process Clause. See, e.g., (DE 53 at 18) (citing Bioheart, Inc. v. Peschong, 2013 WL 1729278 (S.D. Fla. Apr. 22, 2013)). Defendants fail to address, however, that they had other contacts with Florida, including an agent, and those contacts gave rise to the defamatory Article at issue.
I therefore find that the exercises of personal jurisdiction over Defendants Shafran and TMT as to the Individual Plaintiffs' claims comports with traditional notions of fair play and substantial justice. Having done so, I find that the exercise of personal jurisdiction as to Individual Plaintiffs' claims against Defendants Shafran and TMT is appropriate under Florida's long-arm statute and the Due Process Clause.
III. Plaintiff DermaCare v. Defendants Shafran and TMT
Plaintiff DermaCare brings claims for violations of the Lanham Act (Count I), FDUPTA (Count II), Business Disparagement (Count III), and Interference with Business Relationship (Count V). As I explain in Part IV, I dismiss Counts I, II, and V for violating the Single Action Rule. Before doing so, however, I determine that this Court has personal jurisdiction over Defendants Shafran and TMT as to all claims made by Plaintiff DermaCare. My reasons are set forth below under the framework of Plaintiff DermaCare's Business Disparagement claims. I do this because, as I will explain in Part IV, the facts underlying the Business Disparagement claims are the same for the rest of Plaintiff DermaCare's claims. Thus, this personal jurisdiction analysis applies to all of Plaintiff DermaCare's claims.
A. Personal Jurisdiction
The same legal standard set out in Part II.A applies here. Mainly, that first, the district court assesses whether the exercise of jurisdiction is appropriate under Florida's long-arm statute and then whether the exercise of such jurisdiction would comport with the Due Process Clause.
1. Florida's Long-Arm Statute
As described in Part II.A.1, Plaintiffs allege that this Court has personal jurisdiction over Defendants pursuant to Sections 48.193(1)(a)(1)-(2) of Florida's long-arm statute. (DE 43 ¶ 11, 14). Plaintiff DermaCare satisfies both Sections of 48.193(1)(a)(1)-(2). I will begin with the latter section, committing a tortious act within the state.
i. Flo. Stat § 48 .193(1)(a)(2)
"In Florida, before a court addresses the question of whether specific jurisdiction exists under [Fla. Stat. § 48.193(1)(a)(2)], the court must determine 'whether the allegations of the complaint state a cause of action.' " PVC Windoors, Inc., 598 F.3d at 808. Per my analysis in Part II.A.1.i—and the fact that Defendants do not bring a Rule 12(b)(6) challenge to Plaintiff DermaCare's Business Disparagement claims—I find that Plaintiff DermaCare plead sufficient facts to state valid claims under Count III.
A business entity, "may recover for [defamation] just as an individual, where a publication prejudices it in the conduct of its trade or business, deters third persons from dealing with it, assails its management, impugns its methods of doing business or inflicts injury on its credit or business." McIver v. Tallahassee Democrat, Inc., 489 So. 2d 793, 794 (Fla. Dist. Ct. App. 1986).
Having found, as a threshold matter, that Plaintiff DermaCare states valid claims for Business Disparagement (i.e., a tort), I turn to the question of whether the cause of action arises out of a tortious act committed within Florida. See Fla. Stat. § 48.193(1)(a)(2). To make that determination, I look back to Wendt and Internet Sols. Corp., See Part II.A.1.i.
Here, Plaintiff DermaCare alleges that Defendants (1) published the defamatory Article in Florida (DE 55 ¶¶ 41-50), (2) sent numerous defamatory emails into Florida (Id. ¶¶ 54-60), and (3) made false claims to various law enforcement authorities in Florida (Id. ¶¶ 61-70). Unlike the Individual Plaintiffs, all of these statements (if false) defame Plaintiff DermaCare by name. For the same reasons stated in Part II.A.1.i., I will not consider the Article for purposes of personal jurisdiction under this Section of Florida's long-arm statute.
As to the second set of allegations, the emails (excluding the one sent to the FBI), Defendants argue that there is no proof that a third party accessed the emails in Florida. (DE 52 at 11). Relatedly, Defendants argue that Plaintiff DermaCare's agents viewing the email does not constitute a third party. Id. In other words, Defendants challenge the assertion that any defamatory statements were published in Florida. I will address these arguments in reverse order.
Plaintiffs list twelve emails that were allegedly sent by Defendant Shafran to people in Florida. (DE 55 at 9-10). I agree with Defendants that publication of the defamatory statement must be to a third party in Florida. See Internet Sols. Corp., 39 So. 3d at 1215. Plaintiffs Stone and Butler are clearly not third parties in relation to Plaintiff DermaCare. Plaintiffs' FAC does not allege what relation Brent Butler, Isabella Gorski, and Naftaly Hertzel have to Plaintiff DermaCare. As to Butler and Gorski, Defendants put forth sufficient evidence to show they are employees of DermaCare and therefore not third parties. (DE 62 at 12). As to Hertzel, Defendants argue that Plaintiffs' failure to allege who this is in their FAC should be fatal. I agree. The same is true for Stephen Gorba and his business associates. Further, as Plaintiffs later argue—and I agree—Hanna Hertzel is Defendant TMT's agent and therefore not a third party.
The alleged recipients in Florida were as follows: David Wilson, a reporter for The Miami Herald; Isabella Gorski; Plaintiff Stone; Plaintiff Butler; Hanna Hertzel; Naftaly Hertzel; Brent Butler; Stephen Gorba; and two unnamed business associates of Gorba.
These deficiencies narrow the number of emails that Plaintiff may rely on to those sent to The Miami Herald reporter ("Reporter Wilson") and the Miami FBI Field Office. As to the email sent to Report Wilson, this is where Defendants' argument regarding proof of access becomes relevant. Plaintiffs respond that Internet Sols. Corp. did not hold that a plaintiff must plead that the defamatory email was accessed for it to be published in Florida. See 39 So. 3d at 1209 (" '[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' ").
The FAC alleges that the Miami FBI Field Office acknowledged receipt of the defamatory email. (DE 43 ¶ 14).
Independent of what Internet Sols. Corp. may or may not have held, there is no concrete harm—and thus no standing—under the Article III justiciability doctrine if the defamatory statement was not read. See TransUnion LLC v. Ramirez, — U.S. —, 141 S. Ct. 2190, 2210 n.6, 210 L.Ed.2d 568 (2021) (discussing how for defamation to confer Article III standing it must "[bring] an idea to the perception of another . . . and thus generally require evidence that the document was actually read and not merely processed"). (citing Restatement of Torts § 559, Comment a, p. 140 (1938)); cf. Hunstein v. Preferred Collection & Mgmt. Servs., 48 F.4th 1236, 1253 (11th Cir. 2022) (Pryor, C.J., concurring) (in discussing what is required to establish concrete harm for the tort of public disclosure of private facts: "[b]ecause perception of the information is a requirement of communication, a plaintiff must allege 'that the document was actually read and not merely processed.' " (citing TransUnion LLC, 141 S. Ct. at 2210 n.6)). I also cannot infer, from the facts as pled, that Reporter Wilson read the defamatory email. See Muransky v. Godiva Chocolatier, Inc., 979 F.3d 917, 925 (11th Cir. 2020) (en banc) ("we are powerless to 'create jurisdiction by embellishing a deficient allegation of injury.' ").
As to the third set of allegations—the defamatory statements made to law enforcement authorities in Florida—Defendants argue that these were made in "good faith" and should thus be protected under the First Amendment doctrine of Noerr-Pennington and Section 5 of the Florida Constitution. (DE 52 at 12). Plaintiffs have two responses. First, they argue that Noerr-Pennington "is a defense that goes to liability, not jurisdiction." (DE 55 at 14). Second, that whether Defendant Shafran acted in "good faith" is a question of fact that should be construed in Plaintiffs' favor, given the facts as pled, at the motion to dismiss stage. Id. As to the first, I agree with Defendants that given the "threshold" determination required under the long-arm statute, were Noerr-Pennington to apply, there would be no tort. However, as Defendants own case supports, whether Defendant Shafran acted in "good faith" is a question of fact. See Nodar v. Galbreath, 462 So. 2d 803 (Fla. 1984) (reviewing jury trial on whether defendant acted with malice). Plaintiffs plausibly allege, taking their facts as true, that Defendant Shafran did not act in "good faith."
Thus, I find that exercising personal jurisdiction over Defendant Shafran and TMT is appropriate under Fla. Stat. § 48.193(1)(a)(2) as to Plaintiff DermaCare's claims.
ii. Fla. Stat § 48.193(1)(a)(1)
As described in Part II.A.2, Plaintiffs also invoke Fla. Stat.§ 49.193(1)(a)(1). For the same reasons stated in Part II. A.2, I find that the exercise of personal jurisdiction as to Plaintiff DermaCare's claims is appropriate. However, I write to highlight how Defendants' relevant contacts under the statute gave rise to Plaintiff DermaCare's claims.
More specifically, Plaintiffs DermaCare alleges that its CEO—Plaintiff Butler—negotiated a deal with Defendant Shafran (CEO of TMT) in Florida. Again, I construe all facts and reasonable inferences in favor of Plaintiffs. Like for the Individual Plaintiffs, this deal precipitated and is bound up in Defendants' "defamation campaign" (DE 43 ¶ 27) against Plaintiff DermaCare. In addition, Defendants' agent, Ms. Hertzel, was the point person in managing the progress of the Parties' business deal. Thus, the cause of action—Defendants' defamatory statements regarding a business deal gone sour with Plaintiffs—arises out of Defendants' business contacts with Florida. Having found that the exercise of personal jurisdiction over Defendant Shafran and TMT as to Plaintiff DermaCare's claims is appropriate under Fla. Stat. § 48.193(1)(a)(1)-(2), I now address the Due Process question.
2. Due Process Clause
The Due Process analysis is also nearly identical, but I write to highlight some differences given that Plaintiff DermaCare also satisfies Fla. Stat.§ 49.193(1)(a)(2).
i. Relatedness
Plaintiff DermaCare asserts that its claims arise out of several emails and complaints to people in Florida, including law enforcement authorities. (DE 55 at 23-24). This is especially true as it relates to Defendants' defamatory statements made in bad faith to the Miami FBI Field Office and the Florida AG's Office because the defamatory statements were explicitly about Defendants' business transaction with Plaintiffs in Florida. Thus, the first prong of the due process test is met because Plaintiff DermaCare's defamation claims arise out of and relate to Defendants' contact with Florida.
ii. Purposeful Availment
a. Calder Effects Test
All three prongs of the Calder Effects Test are met. First, the defamation was intentional. Second, Defendant made defamatory statements to law enforcement in Florida, whose job it is to investigate malfeasance in Florida. And third, what other effect could have Defendants' intended when they contacted the Miami FBI Field Office and Florida AG's Office? Unsurprisingly, the Florida AG's Office investigated and met with Plaintiff DermaCare, requiring Plaintiffs to retain criminal defense counsel. (DE 43 ¶ 68). That Defendants also made defamatory statements to people all over the United States is of no consequence.
"The Florida AG did not further pursue the investigation beyond the meeting." (DE 43 ¶ 68).
b. Minimum Contacts
I will apply the three prongs listed in Part II. First, Defendants argue, that the statements directed to Florida cannot form the basis of Plaintiff DermaCare's cause of action because they are not torts (e.g., protected by the First Amendment). (DE 52 at 14). Like in Part III, I find that Plaintiff DermaCare can rely on the defamatory statements to state a cause of action. Thus, Plaintiff DermaCare's cause of action arises from Defendants' contacts with Florida.
Second, I find (for the reasons already stated) that Plaintiff DermaCare's claims satisfy the Calder Effects Test and thus satisfy factor two. Id. Moreover, Defendants purposefully availed themselves of the privileges of doing business within Florida. Defendant TMT had an agent in Florida, Ms. Hertzel, and Defendant Shafran negotiated a business deal with Plaintiffs in Florida.
Third, Defendant Shafran, acting on behalf of TMT, negotiated a business deal with Plaintiff DermaCare—a Florida company—in Florida. Defendants should have reasonably understood that any dispute arising from that deal may be adjudicated in a Florida court.
Thus, Plaintiff DermaCare has met its burden of showing that Defendant Shafran and TMT have sufficient minimum contacts with Florida.
iii. Fair Play and Substantial Justice
The first factor is the same. However, under the second, Florida's interest in having this dispute adjudicated is even higher. At issue, thus far, are allegedly defamatory statements made to law enforcement authorities in Florida. As such, those witnesses are here, in Florida. To the extent that Florida government employees and FBI agents of the Miami Field Office will be subpoenaed, called to testify, and so forth, Florida has an interest in such activities happening here.
Third, Plaintiff DermaCare certainly has an interest in adjudicating this dispute in Florida. Plaintiff DermaCare is a Florida company that negotiated a deal in Florida and was then defamed in Florida. And fourth, the judicial system has the same interest in resolving the dispute in Florida given the gain in efficiency with most of the witnesses residing in Florida.
I therefore find that the exercises of personal jurisdiction over Defendants Shafran and TMT as to Plaintiff DermaCare's claims comports with traditional notions of fair play and substantial justice. Having done so, I find that the exercise of personal jurisdiction as to Plaintiff DermaCare's claims against Defendants Shafran and TMT is appropriate under Florida's long-arm statute and the Due Process Clause.
IV. Single Action Rule - Lanham Act (Count I); FDUPTA (Count II); and Interference with Business Relationship (Count V)
Having found that the exercise of personal jurisdiction over Defendants is appropriate as to Plaintiff DermaCare and Individual Plaintiffs' claims, I now reach Defendants' Rule 12(b)(6) challenge to Counts I, II, and V. Defendants argue that Counts I, II, and V should be dismissed for violating the Single Action Rule. (DE 52 at 20). In Florida, the Single Action Rule (also known as the Single Publication Rule) prohibits multiple causes of actions based on a single publication. See Callaway Land & Cattle Co. v. Banyon Lakes C. Corp., 831 So. 2d 204, 208 (Fla. Dist. Ct. App. 2002).
Plaintiffs raise two responses. First, that because there is more than one publication, there can be other claims aside from defamation/business disparagement. (DE 55 at 30). Second, that each counts includes additional allegations. Id. I will take each in turn.
First, no higher federal or state court in Florida has adopted Plaintiffs' view of the Single Action Rule. And at least two courts in this district have taken the opposite view. See Happy Tax Franchising, LLC v. Hill, 2021 WL 3811041 at *7 (S.D. Fla. June 7, 2021) (rejecting the argument that pleading multiple publications allows for multiple causes of action), report and recommendation adopted sub nom. Happy Tax Franchising, LLC v. JL Hill Grp., LLC, 2021 WL 3793050 (S.D. Fla. Aug. 26, 2021); Plain Bay Sales, LLC v. Gallaher, 2020 WL 5750499 at *3 (S.D. Fla. Sept. 25, 2020) (same). I refuse to find otherwise here.
Second, even if Plaintiffs' view were correct, each count incorporates by reference the bulk of the Amended Complaint. Plaintiffs bring no new allegations under each count. Instead, Plaintiffs simply explain how each count allows them to reach different forms of relief. That is exactly the sort of pleading that the Single Action Rule is intended to prevent. See Callaway Land & Cattle Co., 831 So. 2d at 208 ("The various injuries resulting from [the publication] are merely items of damage arising from the same wrong.").
Thus, Counts I, II, and V are dismissed with prejudice.
CONCLUSION
Accordingly, it is hereby ORDERED AND ADJUDGED that:
(1) Defendants' Motion to Dismiss (DE 52) is GRANTED IN PART AND DENIED IN PART.
a. Defendants' Motion to Dismiss is GRANTED as to all of Plaintiffs' claims against Defendant Menin. These claims are dismissed without prejudice. Any amended complaint must be filed on or by December 9, 2022. Such amended complaint shall not add new claims or new defendants and may only attempt to address the pleading deficiencies identified in this order. If no amended complaint is filed the operative Complaint shall be the First Amended Amended Complaint at Docket Entry 43, as modified by my ruling on the instant Motion to Dismiss.
b. Defendants' Motion to Dismiss for lack of personal jurisdiction Plaintiff Stone and Butler's claims under Count IV (Defamation Per Se) is DENIED.
c. Defendants' Motion to Dismiss for lack of personal jurisdiction Plaintiff DermaCare's claims under Count III (Business Disparagement) is DENIED.
d. Defendants' Motion to Dismiss Counts I (Lanham Act), II (FDUPTA), and V (Interference with Business Relationship) is GRANTED. These claims are dismissed with prejudice.
SIGNED, in Chambers, at West Palm Beach, Florida, this 21st day of November, 2022.