AcryliCon USA, LLC v. Silikal GmbH

Filing

Opinion issued by court as to Appellant Silikal GmbH. Decision: Affirmed in part, Dismissed in part and Remanded.. Opinion type: Non-Published. Opinion method: Per Curiam. The opinion is also available through the Court's Opinions page at this link http://www.ca11.uscourts.gov/opinions.

Case: 16-11368

Date Filed: 05/31/2017

Page: 1 of 9

[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 16-11368
________________________
D.C. No. 1:14-cv-01072-TWT
ACRYLICON USA, LLC,
a Delaware limited liability company,
Plaintiff-Appellee,
versus
SILIKAL GMBH & CO.,
a foreign corporation, et al.,
Defendants,
SILIKAL GMBH,
a foreign company,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(May 31, 2017)
Before JULIE CARNES, JILL PRYOR, and ANDERSON, Circuit Judges.
PER CURIAM:

Case: 16-11368

Date Filed: 05/31/2017

Page: 2 of 9

Defendant-Appellant Silikal GmbH (“Silikal”) brings an interlocutory
appeal, pursuant to 28 U.S.C. § 1292(a)(1), challenging the grant of a permanent
injunction in favor of Plaintiff-Appellee, AcryliCon USA, LLC (“AcryliCon”).
Silikal also requests review, as an exercise of this Court’s pendent appellate
jurisdiction, of the district court’s refusal to dismiss the underlying action for lack
of personal jurisdiction. Because the decision to enter a permanent injunction was
correct, and because we do not have pendent jurisdiction over the question of
personal jurisdiction in the circumstances presented by this appeal, we affirm in
part, dismiss in part, and remand to the district court for further proceedings.
I.

Background

AcryliCon is a Georgia-based company that markets and sells an industrial
flooring system. Silikal is a German corporation, which, until recently,
manufactured a flooring resin known as 1061 SW exclusively for AcryliCon. This
resin—the formula for which is AcryliCon’s trade secret—is substantially harder
than other resins and, accordingly, creates a highly durable floor. Other than
AcryliCon, only Silikal had access to the formula for 1061 SW and, even then,
only for the limited purpose of manufacturing it for AcryliCon.
AcryliCon and Silikal have had at least two prior disputes concerning the
latter’s alleged misuse of 1061 SW. One of these actions, filed in the Southern
2

Case: 16-11368

Date Filed: 05/31/2017

Page: 3 of 9

District of Florida, was voluntarily dismissed upon stipulation of the parties. The
other, filed in the Northern District of Georgia, was likewise dismissed after the
parties entered into a global settlement agreement (the “Agreement”). In the
Agreement, Silikal represented that it had not, either directly or indirectly, sold or
distributed 1061 SW resin to anyone other than AcryliCon. Moving forward,
Silikal also agreed that it would not sell or distribute 1061 SW to anyone other than
AcryliCon, unless otherwise expressly permitted in writing. Pursuant to the terms
of the Agreement, both parties waived all future objections to personal jurisdiction
or venue in the Northern District of Georgia “as to all disputes regarding activities
in the United States.”
AcryliCon now claims that Silikal has breached the Agreement and has
continued to repackage 1061 SW as Silikal resin and to sell it with the Silikal
trademark, including to customers in the United States. AcryliCon brought this
action for misappropriation of trade secrets, trademark infringement under the
Lanham Act, federal unfair competition, trademark infringement and unfair
competition under Georgia law, violation of the Georgia Uniform Deceptive or
Unfair Trade Practices Act, and breach of contract. Silikal moved to dismiss the
second amended complaint for lack of personal jurisdiction. The district court
denied that motion. On subsequent cross-motions for summary judgment, the
district court granted partial summary judgment on the breach of contract claim to
3

Case: 16-11368

Date Filed: 05/31/2017

Page: 4 of 9

AcryliCon and entered a permanent injunction barring Silikal from using, selling,
or distributing the 1061 SW resin. This appeal followed.
II.

Discussion

On appeal, Silikal raises two objections to its treatment in the district court.
First, it argues that the court erred in denying the motion to dismiss for lack of
personal jurisdiction. Second, assuming that the exercise of personal jurisdiction
was proper, Silikal argues that the court nonetheless erred by entering a permanent
injunction. We address each argument in turn.
A. Personal Jurisdiction
Silikal first argues that the district court was incorrect to assert the existence
of personal jurisdiction. Because a district court’s determination regarding personal
jurisdiction is not a final order, our review at this interlocutory stage would be
appropriate only as an exercise of pendent jurisdiction. Both parties urge us to find
in favor of such jurisdiction. However, because our discretion over this question is
not nearly as wide as the parties suggest, we must decline to do so.
As the Supreme Court has instructed “[p]endent appellate jurisdiction is
present when a nonappealable decision is ‘inextricably intertwined’ with the
appealable decision or when ‘review of the former decision [is] necessary to ensure
meaningful review of the latter.’” King v. Cessna Aircraft Co., 562 F.3d 1374,
1379 (11th Cir. 2009) (second alteration in original) (quoting Swint v. Chambers
4

Case: 16-11368

Date Filed: 05/31/2017

Page: 5 of 9

Cty. Comm’n, 514 U.S. 35, 51, 115 S. Ct. 1203, 1212 (1995)). We have
consistently agreed with the majority of our sister circuits which read the Supreme
Court’s decision in Swint restrictively and, accordingly, limited our pendent
appellate review to the two situations described in that case. See, e.g., L.S.T., Inc.
v. Crow, 49 F.3d 679, 683 n.8 (11th Cir. 1995); see also Rein v. Socialist People’s
Libyan Arab Jamahiriya, 162 F.3d 748, 757–58 (2d Cir. 1998) (listing this Court as
one of the seven “sister circuits [that] have also adopted a restrictive understanding
of the exceptions to Swint’s general rule”). This limiting principle is not
discretionary, as “the Supreme Court has signaled that pendent appellate
jurisdiction should be present only under rare circumstances [and that] a more
expansive exercise of such jurisdiction would undermine the statutory scheme
governing interlocutory appeals.” King, 562 F.3d at 1379–80 (citing Swint, 514
U.S. at 45–50, 115 S. Ct. at 1209–11). Accordingly, we have repeatedly stated our
conviction that “such jurisdiction [does] not exist when resolution of the
nonappealable issue [is] not necessary to resolve the appealable one.” Id. at 1380
(collecting cases).
Against this backdrop, the exercise of pendent jurisdiction in the
circumstances presented by this appeal is not appropriate. As our discussion below
illustrates, the issue of personal jurisdiction is neither inextricably intertwined with
nor necessary to ensure meaningful review of the district court’s grant of a
5

Case: 16-11368

Date Filed: 05/31/2017

Page: 6 of 9

permanent injunction. The cases to which the briefs urge us to look for our broad
discretion do not reflect the consensus view of the circuit courts or, more
importantly, the established view of this Court. See Rein, 162 F.3d at 758 (noting
that several opinions of the D.C. Circuit—including Jungquist v. Sheikh Sultan Bin
Khalifa Al Nahyan, 115 F.3d 1020 (D.C. Cir. 1997), on which the parties rely
here—have “given Swint a more permissive reading” than other circuit courts).
Accordingly, we are not at liberty to review the question of personal jurisdiction
and express no opinion regarding that issue.
B. Permanent Injunction
Silikal next argues that the district court improperly entered a permanent
injunction because AcryliCon failed to comply with the terms of the Agreement
that govern the steps a non-breaching party must take before filing suit. In relevant
part, that provision states:
In the event of a breach of the provisions of this Settlement
Agreement, the non-breaching party shall provide written notice of the
breach, and the breaching party shall have 10 days to cure its breach.
In the event the breach is not or cannot be cured, the parties shall
attempt in good faith to commence and complete a mediation within
30 days of such written notice. For breaches in the United States,
mediation shall occur in the United States. For breaches outside the
United States, mediation shall occur in Germany. Unless the breach is
not cured or settled by the parties at mediation, the non-breaching
party may commence action to enforce its rights hereunder 30 days
after the date of the written notice.

6

Case: 16-11368

Date Filed: 05/31/2017

Page: 7 of 9

The district court found, notwithstanding AcryliCon’s “fail[ure] to meet certain
technical requirements of the [Agreement],” that Silikal was “bound by its
previous admission that it breached the contract.” Accordingly, it granted
AcryliCon’s motion for summary judgment despite Silikal’s objection.
Silikal argued at the district court—and argues again on appeal—that
AcryliCon filed its initial complaint in the instant case without providing an
opportunity to cure or a period in which to engage in a good-faith mediation. 1 Thus
AcryliCon was not entitled to file its suit and the district court erred by entering its
permanent injunction.
On appeal, AcryliCon acknowledges that its initial complaint was filed
before it provided the requisite notice and opportunity to cure. However, because
the initial complaint did not assert a claim for breach of the Agreement, AcryliCon
argues that it was not required to provide notice at that time. AcryliCon points out
that, after it filed the initial complaint, it provided notice of the alleged breach
(including a copy of the amended complaint), an opportunity to cure, and a good-

1

We note that the language of the Agreement required the parties to attempt a “mediation”
before the non-breaching party could file suit. It does not, as AcryliCon’s brief on appeal
suggests, require merely a “negotiation.” AcryliCon’s mischaracterization of this provision is
particularly curious given that the language is drawn directly from the Agreement that was
attached as an exhibit to their amended complaint.

7

Case: 16-11368

Date Filed: 05/31/2017

Page: 8 of 9

faith invitation to mediate in the United States by letter to Silikal’s attorney. 2 This
notice was sent more than thirty days before the amended complaint—which first
asserted a breach of the Agreement—was filed and, accordingly, AcryliCon argues
that they have complied with the notice provision.
We agree with AcryliCon and affirm the district court’s grant of a permanent
injunction. 3 AcryliCon’s first complaint did not assert a breach of the Agreement.
The terms of the Agreement cannot fairly be read—and Silikal has not argued that
they should be read—to govern causes of action that would exist in its absence.4

2

Silikal responded by claiming that the allegations of the letter and attached complaint
were “not of sufficient detail to qualify as notice.” The response likewise indicated that Silikal
was not amenable to mediation in the United States and suggested mediation in Germany
instead.
3

However, unlike the district court we are not convinced that Silikal’s admitted breach of
the Agreement is sufficient to waive the required notice and mediation provisions. Indeed, that is
the purpose of such provisions—to allow the breaching party a chance to admit, and rectify, its
breach without resorting to the federal courts. Nonetheless, we can affirm the decision of the
district court on any grounds supported by the record. See, e.g., Turlington v. Atlanta Gas Light
Co., 135 F.3d 1428, 1433 n.9 (11th Cir. 1998).
4

Silikal does state in passing that AcryliCon’s “non-contract causes of action are clearly
based on rights it believes it has under the [Agreement].” Why this must be the case, however, is
far from clear. If, as the complaint alleges, Silikal has continued to produce and sell 1061 SW
without AcryliCon’s consent, the non-contract causes of action could exist in the absence of the
Agreement. Certainly, the Agreement contemplates the settlement of all claims—both past and
future—which may entitle Silikal to argue that AcryliCon is contractually barred from bringing
non-contract causes of action. It is not, however, entitled to argue that the non-contract causes—
which arise under federal and state statutory and common law—are based on rights under the
Agreement. In any event, passing references are not sufficient to raise an argument on appeal.
See, e.g., Hamilton v. Southland Christian Sch., Inc., 680 F.3d 1316, 1318–19 (11th Cir. 2012).

8

Case: 16-11368

Date Filed: 05/31/2017

Page: 9 of 9

Therefore, AcryliCon was under no obligation to serve notice or engage in goodfaith mediation at the time their first complaint was filed. After it filed its initial
complaint, AcryliCon served notice of the alleged breach on Silikal. This notice,
despite expressing skepticism that the breaches were susceptible to cure, gave
Silikal the requisite ten days in which to do so and requested that it appear for
mediation at one of several available dates within the applicable thirty day period.
Silikal rejected both of these entreaties and, having waited more than thirty days
from the date on which it provided notice, AcryliCon was thereafter entitled to file
suit for breach of the Agreement. That AcryliCon added the breach of contract
claim to its existing complaint, rather than filing a separate action, is immaterial.
Accordingly, Silikal’s challenge to the preliminary injunction is due to be rejected.
III.

Conclusion

Based on the foregoing, the district court’s entry of a permanent injunction is
affirmed. All other aspects of this appeal are dismissed for want of jurisdiction.
The case is remanded to the district court for further proceedings.
AFFIRMED IN PART, DISMISSED IN PART, AND REMANDED.

9