American Registry, LLC v. Hanaw et al

Filing 61

OPINION AND ORDER denying 43 Defendant Michael Levy's Motion to Dismiss Third Amended Complaint for Lack of Personal Jurisdiction; granting in part and denying in part 42 Defendants' Motion to Dismiss Third Amended Complaint. Counts III, IV, and V of the Third Amended Complaint are dismissed without prejudice. The motion is otherwise denied. See Opinion and Order for details. Signed by Judge John E. Steele on 7/16/2014. (MAB)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
AMERICAN
Delaware
company,

REGISTRY, LLC, a
limited liability

Plaintiff,
v.

Case No: 2:13-cv-352-FtM-29CM

YONAH HANAW, MICHAEL LEVY,
SHOWMARK HOLDINGS, LLC, a
Delaware limited liability
company, and SHOWMARK MEDIA,
LLC,
a
Delaware
limited
liability company,
Defendants.

OPINION AND ORDER
This matter comes before the Court on review of defendants’
Motion to Dismiss Third Amended Complaint (Doc. #42) filed on
January 20, 2014.

Plaintiff filed a Response (Doc. #46) on

February 3, 2014, and defendants, with leave of the Court, filed
a Reply (Doc. #49) on February 27, 2014.

Also before the Court is

defendant Michael Levy’s Motion to Dismiss Third Amended Complaint
for Lack of Personal Jurisdiction (Doc. #43) filed on January 20,
2014.

Plaintiff filed a Response (Doc. #45) on February 3, 2014.
I.

On May 7, 2013, plaintiff American Registry, LLC (plaintiff)
filed a five-count Complaint against Yonah Hanaw (Hanaw), Michael

Levy

(Levy),

Showmark

Holdings,

LLC

(Showmark

Showmark Media, LLC (Showmark Media).
resolve

jurisdictional

deficiencies,

Holdings),

(Doc. #1.)
plaintiff

Amended Complaint (Doc. #7) on May 22, 2013.

and

In order to

filed

a

Second

Thereafter, Levy

filed a motion to dismiss for lack of personal jurisdiction (Doc.
#22), and the remaining defendants filed a motion to dismiss for
failure to state a plausible claim (Doc. #23).
2013,

the

Court

dismissed

the

Second

On December 5,

Amended

Complaint

as

inadequately pled and provided plaintiff with an opportunity to
amend.

(Doc. #35.)

Plaintiff filed a five-count Third Amended

Complaint on December 19, 2013.

In support thereof, plaintiff

alleges as follows:
Plaintiff sells customized achievement recognition items,
such

as

plaques,

marquees,

crystals,

banners, throughout the United States.
business

operations,

plaintiff

has

counter

displays,

and

In connection with its

developed

and

acquired

an

extensive list of trade secrets necessary to conduct its business
operations, including, but not limited to, its business plan;
customer lists; system architecture; financial data; profits and
profit

margins;

statistical

history

with

its

customers

and

vendors; computer programs and software concerning its entire
business operations; research and development information related
to its customers and products offered for sale; information about
its strategic partners and relationships with them; and data and

2

information on its employees, independent contractors, and third
party

vendors

utilizing

this

competitive

(collectively,
information,

advantage

in

“Proprietary
plaintiff

the

personal

is

Information”).
able

to

achievement

By

maintain

a

recognition

market.
Defendant Yonah Hanaw, a citizen and resident of Israel,
worked as a sales agent and independent contractor for plaintiff
from November 2003 until his termination on March 26, 2010.

As a

sales agent, Hanaw was required to sign a Sales Agent Program
Agreement on November 1, 2009. 1

The Sales Agent Program Agreement

provides, in relevant part, that the sales agent agrees to treat
all

confidential

business

information

and

trade

secrets

as

confidential and proprietary to plaintiff and is prohibited from
using such information for his own benefit or for the benefit of
another.
deliver

Upon separation from the company, the sales agent shall
all

records,

data,

information,

and

other

documents

produced or acquired and all copies thereof to plaintiff.

(Doc.

#36-2.)
After his termination, Hanaw met with Michael Levy, also a
citizen and resident of Israel, to discuss the formation and
organization of a company that would sell customized achievement

1Prior

to signing this agreement, Hanaw was bound by a Sales
Agent Program Agreement signed on January 13, 2008. (Doc. #361.)

3

recognition items through an e-commerce website.

On May 12, 2010,

Hanaw and Levy formed Showmark Media, LLC, a Florida limited
liability company, but dissolved it on July 19, 2010.

After the

dissolution of the Florida limited liability company, Hanaw and
Levy formed Showmark Media, LLC, a Delaware limited liability
company. 2
While working as an independent contractor for plaintiff,
Hanaw became intimately familiar with, had access to, and acquired
extensive knowledge of plaintiff’s Proprietary Information, and
was privy to plaintiff’s business and marketing strategies and
plans, costs, pricing, customer and supplier relationships, and
financial strategies.
thieved,

copied,

misappropriated”

Prior to his termination, Hanaw “physically
reproduced,

as

much

replicated,

of

plaintiff’s

Proprietary Information as possible.

converted,

and

confidential

and

(Doc. #36, ¶ 46.)

Hanaw has

utilized and disclosed plaintiff’s Proprietary Information in the
operation of Showmark Media.

Specifically, Hanaw has used the

Proprietary Information to emulate plaintiff’s business model and
to directly target plaintiff’s customers.

2Plaintiff

believes that Hanaw owns a 75 percent interest in
Showmark Media by and through Showmark Holdings, LLC, a Delaware
limited liability complaint.
Showmark Holdings is wholly owned
and controlled by Hanaw. Plaintiff believes Levy owns a 25 percent
interest in Showmark Media.

4

The Third Amended Complaint sets forth the following five
claims based on the alleged misappropriation of trade secrets:
breach of contract against Hanaw only (Count I); violation of the
Florida Uniform Trade Secrets Act (FUTSA) against all defendants
(Count II); violation of the Florida Deceptive and Unfair Trade
Practices Act (FDUTPA) against all defendants (Count III); and
tortious

interference

with

business

defendants (Counts IV and V).

relationships

against

all

Levy seeks dismissal from this

lawsuit on the grounds that plaintiff has failed to allege facts
that establish personal jurisdiction.

The remaining defendants

contend that plaintiff’s trade secret claim is barred by the
statute of limitations and is inadequately pled.

Defendants also

assert that Counts III, IV, and V are preempted by the FUTSA.
II.
The

Court

will

first

address

defendants

Hanaw,

Showmark

Media, and Showmark Holding’s motion to dismiss.
A.

Motion to Dismiss Standard
Under Federal Rule of Civil Procedure 8(a)(2), a Complaint

must contain a “short and plain statement of the claim showing
that the pleader is entitled to relief.”

Fed. R. Civ. P. 8(a)(2).

This obligation “requires more than labels and conclusions, and a
formulaic recitation of the elements of a cause of action will not
do.”

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)

(citation omitted).

To survive dismissal, the factual allegations

5

must be “plausible” and “must be enough to raise a right to relief
above the speculative level.”

Id. at 555.

See also Edwards v.

Prime Inc., 602 F.3d 1276, 1291 (11th Cir. 2010).
“more

than

an

accusation.”

unadorned,

Ashcroft

v.

This requires

the-defendant-unlawfully-harmed-me
Iqbal,

556

U.S.

662,

678

(2009)

(citations omitted).
In deciding a Rule 12(b)(6) motion to dismiss, the Court must
accept all factual allegations in a complaint as true and take
them in the light most favorable to plaintiff, Erickson v. Pardus,
551 U.S. 89 (2007), but “[l]egal conclusions without adequate
factual support are entitled to no assumption of truth,”
v.

Berzain,

omitted).

654

F.3d

1148,

1153

(11th

Cir.

2011)

Mamani

(citations

“Threadbare recitals of the elements of a cause of

action, supported by mere conclusory statements, do not suffice.”
Iqbal, 556 U.S. at 678.
consistent

with

a

facially plausible.”

“Factual allegations that are merely

defendant’s

liability

fall

short

of

being

Chaparro v. Carnival Corp., 693 F.3d 1333,

1337 (11th Cir. 2012) (internal quotation marks and citations
omitted).

Thus, the Court engages in a two-step approach: “When

there are well-pleaded factual allegations, a court should assume
their veracity and then determine whether they plausibly give rise
to an entitlement to relief.”

Iqbal, 556 U.S. at 679.

6

B.

Timeliness of Plaintiff’s Claim Under the FUTSA
Defendants assert that plaintiff’s claim for misappropriation

of trade secrets is clearly barred by the three year statute of
limitations.
trade

Under Florida law, an action for misappropriation of

secrets

“must

be

brought

within

3

years

after

the

misappropriation is discovered or by the exercise of reasonable
diligence should have been discovered.”

Fla. Stat. § 688.007.

The statute of limitations is an affirmative defense, and the
burden of proving an affirmative defense is on the defendant.
Tello v. Dean Witter Reynolds, Inc., 410 F.3d 1275, 1292 (11th
Cir.

2005).

Dismissal

under

Rule

12(b)(6)

on

statute

of

limitations grounds is only appropriate if it is apparent from the
face of the complaint that the claim is time-barred.

Id.

A motion

to dismiss on statute of limitations grounds should not be granted
where resolution depends either on facts not yet in evidence or on
construction

of

factual

defendants’ favor.

ambiguities

in

the

complaint

in

Omar ex rel. Cannon v. Lindsey, 334 F.3d 1246,

1252 (11th Cir. 2003).
After

reviewing

the

allegations

in

the

Third

Amended

Complaint, the Court is unable to determine when the alleged
misappropriation was discovered or should have been discovered by
the exercise of reasonable diligence.
the

face

of

misappropriation

the
of

complaint
trade

that

secrets

7

is

Because it is not clear on
plaintiff’s

claim

for

time-barred,

defendants’

motion to dismiss Count II as untimely is denied.

La Grasta v.

First Union Sec., Inc., 358 F.3d 840, 845-50 (11th Cir. 2004).
C.

Violation of the FUTSA
In order to state a plausible claim for misappropriation of

trade secrets under the FUTSA, Fla. Stat. § 688.001 et seq.,
plaintiff must allege that (1) it possessed secret information and
took reasonable steps to protect its secrecy and (2) the secret it
possessed was misappropriated, either by one who knew or had reason
to know that the secret was improperly obtained or by one who used
improper means to obtain it.

VAS Aero Servs., LLC v. Arroyo, 860

F. Supp. 2d 1349, 1358 (S.D. Fla. 2012) (citing Del Monte Fresh
Produce Co. v. Dole Food Co., 136 F. Supp. 2d 1271, 1291 (S.D.
Fla. 2001)).

The Court previously dismissed plaintiff’s claim for

misappropriation of trade secrets because the broad list of trade
secrets in the Second Amended Complaint failed to give defendants
notice of what was misappropriated and was devoid of factual
allegations supporting the actual misappropriation.

Defendants

assert that plaintiff has once again failed to identify the alleged
trade secrets with reasonable particularity or allege any facts
regarding the alleged misappropriation.
(1)

The Alleged Trade Secrets

In order to state a plausible claim under the FUTSA, a
plaintiff

need

only

identify

the

alleged

trade

secrets

with

reasonable particularity. Treco Int’l S.A. v. Kromka, 706 F. Supp.

8

2d 1283, 1286 (S.D. Fla. 2010) (citing Levenger Co. v. Feldman,
516 F. Supp. 2d 1272, 1287 (S.D. Fla. 2007)).

“To qualify as a

trade secret, the information that the plaintiff seeks to protect
must derive economic value from not being readily ascertainable by
others and must be the subject of reasonable efforts to protect
its secrecy.”

Del Monte, 136 F. Supp. 2d at 1291. Whether a

particular type of information constitutes a trade secret is a
question of fact.

See Furmanite America, Inc. v. T.D. Williamson,

Inc., 506 F. Supp. 2d 1134, 1141 (M.D. Fla. 2007).
Here, plaintiff replaced the long and broad list of alleged
trade secrets found in the Second Amended Complaint with ten
specific

categories

of

trade

secrets.

(Doc.

#36,

¶

22.)

Defendants concede that, in certain circumstances, information
contained in some of the ten categories may constitute a trade
secret, but argue that some of the categories should be dismissed
as vague.

The Court disagrees.

After thoroughly reviewing the

allegations identifying the purported trade secrets in the Third
Amended Complaint, the Court finds that plaintiff has described
the alleged trade secrets with reasonable particularity; thus,
dismissal for failure to identify the alleged trade secrets is not
warranted.

9

(2)

The Alleged Misappropriation

Defendants also assert that plaintiff has failed to provide
any factual allegations showing that the alleged misappropriation
is plausible.

The FUTSA defines misappropriation as the:

(a)

Acquisition of a trade secret of another by a person
who knows or has reason to know that the trade
secret was acquired by improper means; or

(b)

Disclosure or use of a trade secret of another
without express or implied consent by a person who:
1. Used improper means to acquire knowledge of the
trade secret; or
2. At the time of disclosure or use, knew or had
reason to know that her or his knowledge of the
trade secret was:
a. Derived from or through a person who
utilized improper means to acquire it;

had

b. Acquired under circumstances giving rise to a
duty to maintain its secrecy or limit its use;
or
c. Derived from or through a person who owed a
duty to the person seeking relief to maintain
its secrecy or limit its use; or
3. Before a material change of her or his position,
knew or had reason to know that it was a trade
secret and that knowledge of it had been acquired
by accident or mistake.
Fla. Stat. § 688.002(2).
Here, plaintiff alleges that Hanaw acquired its Proprietary
Information through the use of improper means.

Specifically,

plaintiff alleges that Hanaw, prior to having his sales agency
relationship terminated, physically thieved, copied, reproduced,

10

replicated, converted, and misappropriated American Registry’s
Proprietary Information.

(Doc. #36, ¶ 62.)

Plaintiff further

alleges that Hanaw used the stolen Proprietary Information without
plaintiff’s consent in order to emulate plaintiff’s business model
and to directly target plaintiff’s customers.

(Id.)

Hanaw also

disclosed the stolen Proprietary Information to third parties,
including Levy, Showmark Holdings, and Showmark Media, in breach
of his contractual duty to preserve the secrecy of the Proprietary
Information and without plaintiff’s consent.

(Id. ¶ 63.)

The

Court finds that these allegations are sufficient to state a
plausible claim against Hanaw under the FUTSA. 3
As to the remaining defendants, plaintiff alleges that Levy,
Showmark

Holdings,

and

Showmark

Media

acquired

the

stolen

Proprietary Information from Hanaw when they knew, or had reason
to know, that it was stolen and that Hanaw had a duty to preserve
the secrecy of the information.

(Id. ¶¶ 65-66, 68.)

Plaintiff

further alleges that Levy, Showmark Holdings, and Showmark Media
have utilized the Propriety Information without just cause or

3Defendants

argue in a footnote that the breach of contract
claim asserted against Hanaw in Count I should be dismissed because
plaintiff has failed to allege any facts regarding the
misappropriation of trade secrets.
(Doc. #42, p. 8 n.1.)
The
Court disagrees.
As discussed above, plaintiff has adequately
alleged that Hanaw has used and disclosed plaintiff’s Proprietary
Information, and has further alleged that such conduct constitutes
a breach of the Sales Agent Program Agreement.
Therefore,
defendants’ motion to dismiss Count I is denied.

11

permission to emulate plaintiff’s business model and directly
target plaintiff’s customers with the ability to undercut pricing
and provide discounts.
Defendants

(Id. ¶ 67.)

assert

that

these

allegations

should

be

disregarded because they are conclusory in nature. The Court finds
that

these

allegations

contain

enough

factual

matter

which

plausibly suggest that Levy, Showmark Holdings, and Showmark Media
have misappropriated plaintiff’s trade secrets in violation of the
FUTSA.

Accordingly, defendants’ motion to dismiss Count II of the

Third Amended Complaint is denied.
D. Preemption Under the FUTSA
Defendants

Hanaw,

Showmark

Media,

and

Showmark

Holdings

contend that the remaining claims in the Third Amended Complaint
are prohibited by the preemption provision of the FUTSA. The FUTSA
displaces “conflicting tort, restitutory, and other law of this
state providing civil remedies for misappropriation of a trade
secret.”

Fla. Stat. § 688.008(1).

The FUTSA, however, does not

preempt contractual remedies or “[o]ther civil remedies that are
not based upon misappropriation of a trade secret.”
688.008(2)(a)-(b).

Fla. Stat. §

“Thus, FUTSA preempts all claims, other than

claims ex contractu, based on misappropriation of trade secrets.”
American Honda Motor Co. v. Motorcycle Info. Network, Inc., 390 F.
Supp. 2d 1170, 1180 (M.D. Fla. 2005).

Defendants contend that the

remaining claims in the Third Amended Complaint are preempted by

12

the FUTSA because they are based solely on the misappropriation of
trade secrets.
Plaintiff does not dispute that the FUTSA displaces other
tort and statutory claims to the extent those claims are based
solely on the misappropriation of trade secrets. Plaintiff argues,
however,

that

a

claim

based

upon

the

misappropriation

of

information that does not rise to the level of statutorily-defined
“trade secret” should not be preempted.

In effect, plaintiff

contends that it has pled its claims in the alternative.
A

majority

of

jurisdictions

rejected plaintiff’s argument.
has

generally

been

considering

this

issue

have

“[T]he UTSA’s preemption provision

interpreted

to

abolish

all

free-standing

alternative causes of action for theft or misuse of confidential,
proprietary, or otherwise secret information falling short of
trade

secret

status

(e.g.,

idea

misappropriation,

piracy, theft of commercial information, etc.).”

information

Hauck Mfg. Co.

v. Astec Indus., Inc., 375 F. Supp. 2d 649, 655 (E.D. Tenn. 2004)
(citing cases).

See also Miami Valley Mobile Health Servs., Inc.

v. ExamOne Worldwide, Inc., 852 F. Supp. 2d 925, 940 (S.D. Ohio
2012)

(holding

that

the

“UTSA

preempts

all

claims

based

on

misappropriation of information even if that information does not
rise to the level of a ‘trade secret.’”); CDC Restoration &
Constr., LC v. Tradesmen Contractors, LLC, 274 P.3d 317, 330 (Utah.
Ct. App. 2012) (“[A] majority of jurisdictions considering the

13

question have held that a court need not first determine whether
the information that [the plaintiff] alleges was misappropriated
constitutes a trade secret before determining whether [the UTSA]
displaces

[the

plaintiff's]

common-law

claims.”);

BlueEarth

Biofuels, LLC v. Hawaiian Elec. Co., 235 P.3d 310, 323 (Haw. 2010)
(holding that “HUTSA preempts non-contract, civil claims based on
the improper acquisition, disclosure or use of confidential and/or
commercially valuable information that does not rise to the level
of a statutorily-defined trade secret.”).
The primary criticism of the majority’s interpretation of the
UTSA’s preemption provision “is that it would permit a plaintiff’s
claim to be preempted by a statute that grants him no cause of
action.”

CDC Restoration & Constr., LC, 274 P.3d at 330 (internal

quotation marks and citations omitted).

That is, a plaintiff may

be left unable to prove that its confidential information qualifies
as a “trade secret” under the UTSA, yet barred by the UTSA from
proceeding on any theory.
the

UTSA’s

corporate

preemption
entities

Although this result may seem harsh,

provision

to

protect

does

“permit

their

individuals

valuable

and

commercial

information contractually, regardless of whether such information
meets the statutory definition of ‘trade secret.’”

Id. (quoting

Mortgage Specialists, Inc. v. Davey, 904 A.2d 652, 664 (N.H.
2006)).

See also Fla. Stat. § 688.008.

14

In light of the mandate that the FUTSA “be applied and
construed to effectuate its general purpose to make uniform the
law with respect to the subject of this act among states enacting
it,” Fla. Stat. § 688.009, this Court will follow the majority’s
interpretation of the UTSA’s preemption provision.

Therefore, the

Court finds that the FUTSA preempts all non-contract claims based
on

the

misappropriation

of

confidential

and/or

commercially

valuable information even if the information does not constitute
a trade secret under the FUTSA.

The Court must review the

underlying factual allegations in each of the remaining claims to
determine if they are based on the misappropriation of information,
and therefore displaced by the FUTSA.

E.g., Penalty Kick Mgmt.

LTD. v. Coca Cola Co., 318 F.3d 1284, 1296-97 (11th Cir. 2003)
(1)

Violation of the FDUTPA

Count III of the Second Amended Complaint alleges a violation
of

the

FDUTPA

Proprietary
provided.
viable

and

is

predicated

Information. 4

No

on

other

the

use

factual

of

plaintiff’s

allegations

are

Plaintiff argues that its claim under the FDUTPA is

because

it

does

not

require

4Plaintiff

proof

of

trade

secret

also alleges that defendants intentionally and
unjustifiably interfered with plaintiff’s customer relationships,
converted and solicited plaintiff’s customers, and created
customer confusion by “palming” off plaintiff’s products. These
allegations, however, are not entitled to presumption of
truthfulness because the Third Amended Complaint is devoid of
factual allegations supporting these conclusory statements.

15

misappropriation.
FDUTPA

Plaintiff is correct in that a claim under the

generally

does

not

require

proof

of

trade

secret

misappropriation; however, a FDUTPA claim based solely on the
misappropriation of information, as is the case here, cannot avoid
preemption under Fla. Stat. § 688.008.
Co., 390 F. Supp. 2d at 1181.

See American Honda Motor

See also Hauck Mfg. Co., 375 F.

Supp. 2d at 658 (“[I]f proof of a non-UTSA claim would also
simultaneously establish a claim for misappropriation of trade
secrets, it is preempted irrespective of whatever surplus elements
or proof were necessary to establish it.”); BlueEarth Biofuels,
LLC, 235 P.3d at 316 (“the UTSA’s preemptive force reaches more
than just claims of or for misappropriation of a trade secret.”).
Because Count III of plaintiff’s Third Amended Complaint is based
solely

on

the

misappropriation

of

plaintiff’s

Proprietary

Information, it will be dismissed as preempted or displaced by the
FDUTPA.
(2)

Tortious Interference with Business Relations

Plaintiff
interference
Complaint.
and

sets
with

two

business

separate

relations

in

counts

for

tortious

the

Third

Amended

Count IV alleges that “[t]he Defendants intentionally

unjustifiably

wrongfully

forth

interfered

converting

the

with

Customer

Proprietary

Relationships

Information,

converting

customers and soliciting AMERICAN REGISTRY’s customers.”
#7, ¶ 79.)

by

(Doc.

Even if the Court were to assume that the conclusory

16

allegations state a plausible claim, dismissal would still be
warranted because the claim is premised solely on the use of
plaintiff’s

Proprietary

conversion

of

Information.

plaintiff’s

Proprietary

Absent

the

Information,

wrongful
there

is

nothing to suggest that the conversion and solicitation of American
Registry’s customers is tortious.

See International Paper Co. v.

Stuit, No. C11-2139JLR, 2012 WL 1857143, at *6-7 (W.D. Wash. May
21, 2012) (dismissing tortious interference claim as preempted
because the claim hinged on defendant’s use of plaintiff’s trade
secrets).

Thus, Count IV is preempted or displaced by the FUTSA.

Count V alleges Levy, Showmark Holdings, and Showmark Media
intentionally and unjustifiably interfered with the relationship
between American Registry and Hanaw by inducing Hanaw to breach
the

confidentiality

Agreement.

provision

of

the

Sales

Agent

Program

The only way for plaintiff to prevail on this claim is

to prove misappropriation of trade secrets or other confidential
information.

See BlueEarth Biofuels, LLC v. Hawaiian Elec. Co.,

780 F. Supp. 2d 1061, 1077 (D. Haw. 2011).

Because all claims

based on the misappropriation of information, whether or not it
meets the definition of a trade secret, are pre-empted or displaced
by the FUTSA, Count V is due to be dismissed.
In conclusion, the Court finds that Counts III, IV, and V are
preempted or displaced by the FUTSA and will be dismissed as such.

17

The Court will now address Levy’s motion to dismiss for lack of
personal jurisdiction.
III.
A court is obligated to dismiss an action against a defendant
over which it has no personal jurisdiction.

Posner v. Essex Ins.

Co., 178 F.3d 1209, 1214 n.6 (11th Cir. 1999).

Whether a court

has personal jurisdiction over a defendant in a diversity case is
governed by a two-part analysis.

Mutual Serv. Ins. Co. v. Frit

Indus., 358 F.3d 1312, 1319 (11th Cir. 2004).

The Court must first

determine whether the exercise of jurisdiction is appropriate
under the forum state’s long-arm statute.

Future Tech. Today,

Inc. v. OSF Healthcare Sys., 218 F.3d 1247, 1249 (11th Cir. 2000)
(citing Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 626
(11th Cir. 1996).

If the Court determines that the long-arm

statute is satisfied, it must then determine “whether the extension
[of] jurisdiction comports with the due process requirements of
the Fourteenth Amendment.”

Meier ex rel. Meier v. Sun Int’l

Hotels, Ltd., 288 F.3d 1264, 1269 (11th Cir. 2002) (citing Posner,
178 F.3d at 1214).
The reach of Florida’s long-arm statute is a question of
Florida law and federal courts must construe it as would the
Florida Supreme Court.

United Techs. Corp. v. Mazer, 556. F.3d

1260, 1274 (11th Cir. 2009) (citations omitted).

Absent some

indication that the Florida Supreme Court would hold otherwise,

18

this Court is bound to the decisions of Florida’s intermediate
courts.

Id.

Under Florida law, “[a] plaintiff seeking the exercise of
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.”

Mazer, 556 F.3d at

1274

In

(citing

Posner,

178

F.3d

at

1214).

assessing

the

sufficiency of the jurisdictional allegations, the Court must
accept

the

factual

allegations

in

the

complaint

as

true.

Licciardello v. Lovelady, 544 F.3d 1280, 1284 n.3 (11th Cir. 2008)
(citing Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir. 1990)).

If

the plaintiff’s factual allegations are sufficient to support the
exercise of personal jurisdiction, the burden then shifts to the
defendant to challenge the allegations with affidavits or other
evidence to the contrary.
omitted).

Meier, 288 F.3d at 1269 (citations

The burden then shifts back to the plaintiff to produce

evidence supporting jurisdiction.
In this mater, Levy has failed to submit an affidavit or any
other

evidence

challenging

the

jurisdictional

allegations;

therefore, the Court’s analysis is limited to the sufficiency of
the allegations.
A.

Florida’s Long-Arm Statute
Florida’s long-arm statute provides for specific and general

jurisdiction.

In this case, plaintiff relies solely on specific

19

jurisdiction.

“Specific jurisdiction refers to ‘jurisdiction over

causes of action arising from or related to a defendant’s actions
within the forum.’” PVC Windoors, Inc. v. Babbitbay Beach Constr.,
N.V., 598 F.3d 802, 808 (11th Cir. 2010) (quoting Oldfield v.
Pueblo De Bahia Lora, S.A., 558 F.3d 1210, 1220 n.27 (11th Cir.
2009)).

Florida’s long-arm statute provides, in relevant part,

that a person “[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” or “[c]omitting a tortious act within
this state” is subject to specific personal jurisdiction.

Fla.

Stat. § 48.193(1)(a)(1)-(2).
(1)
A

Section 48.193(1)(a)(1) – Conducting Business in Florida

defendant

“submits

himself

or

herself

.

.

.

to

the

jurisdiction of the courts of this state for any cause of action
arising from” defendant’s activities “[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.”
48.193(1)(a)(1).

In

order

to

establish

that

a

Fla. Stat. §
defendant

is

“carrying on a business” for the purpose of the long arm statute,
the activities must be considered collectively and “show a general
course of business activity in the State for pecuniary benefit.”
Fraser v. Smith, 594 F.3d 842, 848 (11th Cir. 2010) (citing
Dinsmore v. Martin Blumenthal Assocs., Inc., 314 So. 2d 561, 564
(Fla.

1975)).

See

also

Horizon

20

Aggressive

Growth,

L.P.

v.

Rothstein-Kass,

P.A.,

421

F.3d

1162,

1167

(11th

Cir.

2005).

Relevant factors 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, 421 F.3d at 1167 (internal

citations omitted).
Here, plaintiff alleges that Levy, a citizen and resident of
Israel, is subject to personal jurisdiction in Florida because he
participated in the formation and organization of Showmark Media.
(Doc. #36, ¶¶ 5, 7.)
Florida

limited

Showmark Media was originally formed as a

liability

company

on

May

12,

2010,

and

was

subsequently dissolved on July 19, 2010. (Id. ¶¶ 40-41.) Alleging
only that Levy participated in the formation of a company that was
dissolved approximately four years ago is not the same as alleging
that Levy is “operating . . . or carrying on a business or business
venture in this state.”

Fla. Stat. § 48.193(1)(a).

See Schwab v.

Hites, 896 F. Supp. 2d 1124, 1135 (M.D. Fla. 2012).
Plaintiff also alleges that Levy and Showmark Media “conduct
business within this judicial district.”

(Doc. #36, ¶ 7.)

This

allegation is conclusory and cannot serve as the basis for personal
jurisdiction. See Snow v. DirecTV, Inc., 450 F.3d 1314, 1318 (11th
Cir.

2006)

insufficient

(“vague
to

and

establish

conclusory
a

prima

21

allegations

.

facie

of

case

.

.

are

personal

jurisdiction . . . .”).

Due to the absence of factual allegations

showing a general course of business activity in Florida, the Court
finds that plaintiff has failed to plead a prima facie case of
jurisdiction against Levy under Fla. Stat. § 48.193(1)(a)(1).
(2)

Section 48.193(1)(a)(2) – Committing a Tortious Act

Section

48.193(1)(a)(2)

provides

for

jurisdiction

over

a

defendant who “committ[s] a tortious act within this state.”

Fla.

Stat.

invoke

this

that

Levy

§

48.193(1)(a)(2).

provision

of

the

misappropriated

Plaintiff

long-arm

plaintiff’s

attempts

statute

by

Proprietary

to

alleging
Information

intent to financially injure plaintiff in Florida.

with

the

(Doc. #36, ¶¶

7, 69, 71.) Levy argues that the misappropriation of trade secrets
is

not

a

tortious

act

within

the

state

where

disclosure or use occurs outside of Florida.

the

improper

To support his

contention, Levy cites to Arch Aluminum & Glass Co., Inc. v. Haney,
964 So. 2d 228 (Fla. 4th DCA 2007).
In

Arch

Aluminum,

the

plaintiff,

a

Florida

corporation,

employed the defendant as a national sales manager.

Id. at 230.

During his employment with the plaintiff, the defendant gained
access to confidential information, including client lists, sales
projections,

prior

statements.

Id.

sales

data,

business

plans,

and

financial

The defendant had been informed, through the

employee handbook, that such information was the property of the
plaintiff.

Id. at 231.

Shortly after accepting a job with a

22

competitor in Nevada, the defendant disclosed the plaintiff’s
confidential information to his new employer.

Id.

The plaintiff

brought suit against the defendant and his new employer, asserting
claims for, among other things, misappropriation of trade secrets.
Id.
The Florida appellate court determined that the acts of the
defendant did not result in a tortious act in Florida because the
distribution of the confidential information occurred in Nevada
and Arizona.

Id. at 233.

“Even if [the plaintiff] suffered

damage, it would have been a loss of western clients and the
reduction
Florida.

of

revenues

Id. at 234.

from

its

Phoenix

operation,”

not

from

Consequently, the court concluded that the

long-arm statute was not satisfied; therefore, the court did not
have personal jurisdiction.

Id.

Levy’s reliance on Arch Aluminum hinges on the assumption
that the use or disclosure of plaintiff’s confidential information
did not occur in Florida.

Plaintiff, however, alleges that Levy

used plaintiff’s Proprietary Information in the formation and
operation of Showmark Media in Florida and intended to injure
plaintiff.

(Doc.

#36,

¶

7.)

Because

the

alleged

use

of

plaintiff’s Proprietary Information is tortious and occurred in
Florida, the Court finds that plaintiff has adequately alleged
personal jurisdiction pursuant to Fla. Stat. § 48.193(1)(a)(2).

23

B.

Constitutional Due Process
In order to determine whether the Due Process Clause permits

the

exercise

of

personal

jurisdiction

over

a

defendant

who

satisfies the long-arm statute, the court must consider two things.
First,

the

court

must

determine

whether

the

defendant

has

purposefully established such constitutionally significant contact
with the state of Florida that he could have reasonably anticipated
that he might be sued here in connection with those activities.
If the defendant has done so, the court must determine whether the
forum’s interest in the dispute and the plaintiff’s interest in
obtaining relief are outweighed by the burden of the defendant
having to defend himself in a Florida court.

Licciardello, 544

F.3d at 1284.
Levy argues that personal jurisdiction cannot be exercised
because plaintiff has failed to allege that Levy has any contacts
with Florida.

The Court disagrees.

As discussed above, plaintiff

has alleged that Levy used the misappropriated information in the
formation of Showmark Media in Florida and, more importantly,
plaintiff

has

alleged

that

Levy’s

use

and

disclosure

of

the

Proprietary Information was done with the intent to financially
injure

plaintiff

sufficient.

in

Florida.

The

Court

finds

this

to

be

See Licciardello, 544 F.3d at 1288 (“The Constitution

is not offended by the exercise of Florida’s long-arm statute to
effect

personal

jurisdiction

over

24

[defendant]

because

his

intentional conduct in his state of residence was calculated to
cause injury to [plaintiff] in Florida.”).
Because Levy does not argue that the exercise of jurisdiction
over him would not comport with fair play and substantial justice,
the Court declines to address the issue.

In conclusion, the Court

finds that plaintiff has pled a prima facie case for personal
jurisdiction; therefore, Levy’s motion to dismiss for lack of
personal jurisdiction is denied.
Accordingly, it is now
ORDERED:
1.

Defendants’ Motion to Dismiss Third Amended Complaint

(Doc. #42) is GRANTED in part and DENIED in part.
and

V

of

the

prejudice.
2.

Third

Amended

Complaint

are

Counts III, IV,

dismissed

without

The motion is otherwise denied.
Defendant Michael Levy’s Motion to Dismiss Third Amended

Complaint for Lack of Personal Jurisdiction (Doc. #43) is DENIED.
DONE AND ORDERED at Fort Myers, Florida, this
July, 2014.

Copies:
Counsel of record

25

16th

day of