American Mariculture, Inc. v. Syaqua Americas, Inc.

Filing 65

OPINION AND ORDER granting 49 Motion to Strike, striking 46 Jury demand. The Clerk shall reset the case as a bench trial. Signed by Judge John E. Steele on 7/19/2021. (RKR)

Case 2:20-cv-00711-JES-MRM Document 65 Filed 07/19/21 Page 1 of 7 PageID 597

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
AMERICAN MARICULTURE, INC.,
a Florida corporation and
AMERICAN PENAEID, INC.,
Plaintiffs,
v.

Case No:

2:20-cv-711-JES-MRM

SYAQUA AMERICAS, INC., a
Florida corporation and
SYAQUA GROUP PTE. LTD.,
Defendants.
OPINION AND ORDER
This matter comes before the Court on defendant's Motion to
Strike Plaintiff's Jury Demand (Doc. #49) filed on January 5, 2021.
Plaintiff filed a Response in Opposition (Doc. #57) on February
22, 2021.
The relevant allegations in the Complaint (Doc. #1) 1 provide
that

plaintiff

and

defendant

executed

a

Memorandum

of

Understanding in 2016 for plaintiff to produce shrimp broodstock
for defendant at plaintiff’s facilities in St. James City, Florida.
After the expiration of the initial two-year term, plaintiff
terminated the Memorandum and gave defendant 12 months advance
notice of the obligation to remove any shrimp and materials from

An Amended Complaint (Doc. #61) was filed on June 21, 2021,
after the Demand for Jury Trial (Doc. #46) and after the motion to
strike the Demand was filed.
The Court will focus on the
allegations in the original Complaint (Doc. #1).
1

Case 2:20-cv-00711-JES-MRM Document 65 Filed 07/19/21 Page 2 of 7 PageID 598

the facility.

In 2019, the parties entered into a second agreement

providing that plaintiff would continue to utilize its own shrimp
breeding facility to grow out shrimp provided by defendant for
subsequent sale by defendant outside the United States.

This

Production Agreement has an initial five-year term ending in
September 2023, and defendant cannot terminate prior to the end of
this term without cause.
Plaintiff

alleges

that

defendant

breached

the

Production

Agreement by engaging in the theft of confidential and trade secret
information

consisting

plaintiff’s shrimp.

of

breeding

(Doc. #1, ¶ 20.)

records

pertaining

to

Plaintiff also alleges a

breach of the Production Agreement by engaging in theft of shrimp
tissue samples.

(Id., ¶ 21.)

Plaintiff alleges that defendant

breached the Production Agreement by disseminating a marketing
brochure in India that falsely claimed that defendant was in
possession of the Kentucky line, and falsely claimed that defendant
owned plaintiff’s production facilities.

(Id., ¶ 25.)

Plaintiff

alleges that defendant breached the Agreement by falsely claiming
association with plaintiff’s various lines of shrimp in both China
and Indonesia.

(Id., ¶ 26.)

Count I of the Complaint alleges unfair competition under the
Lanham Act and Count II alleges the same under Florida law.
Plaintiff alleges that “Defendant’s unauthorized use in commerce
of the marks, “AMI” and “Kentucky line” . . . constitutes use of
a false designation of origin and misleading description and
- 2 -

Case 2:20-cv-00711-JES-MRM Document 65 Filed 07/19/21 Page 3 of 7 PageID 599

representation of fact”, and that “Defendant’s conduct as alleged
herein constitutes unfair competition in violation of Chapter
501.204, Florida Statutes.

(Id., ¶¶ 32, 39.) Count III alleges a

theft of trade secrets under the Defend Trade Secrets Act and Count
IV alleges the same under state law.
shrimp

breeding

records

were

Plaintiff alleges that its

misappropriated

misrepresentations and acts of espionage.

by

intentional

(Id., ¶¶ 44, 52.)

Count V alleges a breach of the Production Agreement and Count VI
alleges a breach of the duty of good faith and fair dealing.
Defendant argues that the demand for a trial by jury must be
stricken because plaintiff waived its right to a jury trial for
all claims “arising out of” the Production Agreement.
p. 2.)

(Doc. #49,

Plaintiff agrees that Count VI for breach of the duty of

good faith and fair dealing arises out of the Production Agreement
and is covered by the jury waiver provision.

However, plaintiff

takes the position that a jury demand is appropriate for Counts I
through IV. 2

(Doc. #57, p. 2 n.1.)

“A party may validly waive its Seventh Amendment right to a
jury trial so long as the waiver is knowing and voluntary. See
Brookhart v. Janis, 384 U.S. 1, 4–5, 86 S. Ct. 1245, 1246–47, 16
L. Ed. 2d 314 (1966); see also Leasing Serv. Corp. v. Crane, 804
F.2d 828, 833 (4th Cir. 1986).”

Bakrac, Inc. v. Villager Franchise

Sys., Inc., 164 F. App'x 820, 823–24 (11th Cir. 2006).

“[W]hile

There is no disagreement as to Count V being excluded from
the jury demand.
2

- 3 -

Case 2:20-cv-00711-JES-MRM Document 65 Filed 07/19/21 Page 4 of 7 PageID 600

‘the seventh amendment right is . . . a fundamental one,’ courts
have

recognized

that

‘it

is

one

intentionally waived by contract.’”

that

can

be

knowingly

and

Aponte v. Brown & Brown of

Fla., Inc., 806 F. App'x 824, 827 (11th Cir. 2020) (citations
omitted).
Paragraph 12 of the Production Agreement states, “The parties
waive any right to a trial by jury in the event of litigation
arising out of this Agreement.”

(Doc. #49-1, p. 7.)

Similar to

a clause requiring arbitration, the Court focuses “on whether the
tort or breach in question was an immediate, foreseeable result of
the performance of contractual duties.”

Telecom Italia, SpA v.

Wholesale Telecom Corp., 248 F.3d 1109, 1116 (11th Cir. 2001).
In Princess Cruise Lines, the Eleventh Circuit noted that
“[i]f the cruise line had wanted a broader arbitration provision,
it should have left the scope of it at “any and all disputes,
claims, or controversies whatsoever” instead of including the
limitation that narrowed the scope to only those disputes, claims,
or controversies “relating to or in any way arising out of or
connected with” the agreement.

Doe v. Princess Cruise Lines,

Ltd., 657 F.3d 1204, 1218 (11th Cir. 2011).

See also Jaffe v.

Bank

(11th

of

Am.,

N.A.,

395

F.

App'x

583,

586

Cir.

2010)

(examining an “unequivocal” and broader waiver “arising out of, in
connection with or in any way pertaining to, this agreement.”).
“The term ‘arising out of’ is broad, but it is not all
encompassing.”

Princess Cruise Lines, 657 F.3d at 1218.
- 4 -

Disputes

Case 2:20-cv-00711-JES-MRM Document 65 Filed 07/19/21 Page 5 of 7 PageID 601

that are not related-with at least some directness-to performance
of duties specified by the contract do not count as disputes
‘arising out of’ the contract, and are not covered by the standard
arbitration clause.”

Telecom Italia, 248 F.3d at 1116.

The

Florida Supreme Court has held that ‘arising out of’ is ‘broader
in meaning than “the term ‘caused by’ and means ‘originating from,’
‘having its origin in,’ ‘growing out of,’ ‘flowing from,’ ‘incident
to’ or ‘having a connection with.’”

James River Ins. Co. v. Ground

Down Eng'g, Inc., 540 F.3d 1270, 1275 (11th Cir. 2008) (quoting
Taurus Holdings, Inc. v. United States Fid. and Guar. Co., 913
So.2d 528, 539 (Fla. 2005)).
In this case, the waiver is limited to “arising out of” the
Production Agreement to produce Vannamei breeders for export of
live shrimp outside the United States.

Under the Production

Agreement, either party may terminate for cause, including for:
the

“intentional

act

of

fraud,

theft

or

any

other

material

violation of law”; the “intentional disclosure of confidential
information”; or the “intentional engagement in any competitive
activity which would constitute a breach of duty.”
p. 2.)

(Doc. #1-1,

The Production Agreement also contains several competitive

restrictions:
a. Neither of the parties may knowingly or
purposely circumvent, or cause the breach of,
or undermine an exisiting [sic] breeders sales
contract. Both companies are free to offer
their breeders on a best effort’s basis to
existing or potential customers worldwide.
Both parties agree to compete in an honest and
- 5 -

Case 2:20-cv-00711-JES-MRM Document 65 Filed 07/19/21 Page 6 of 7 PageID 602

ethical way. Both parties agree not to
disparage or make false claims about each
other in any way, while this Agreement is in
force and for one year after the Termination
Date.
b. SyAqua Agrees not to offer any Floridagrown SyAqua Breeders to any hatchery located
in the U.S. and Canada.
c. The commercial name of “SyAqua” in any form
remains the sole property of SyAqua Group
Incorporated and may not be used, directly or
indirectly, by AM or any individual or entity
affiliated with AMI without written approval.
d. While the Agreement is in force, AMI agrees
that they will not enter into any similar
agreement with other parties for the use of
the Hatchery to raise or store Breeders.
e. SyAqua will supply, without charge, up to
1,000 pairs of commercial production Breeders
annually for use in the hatchery in order for
AM I to produce commercial PL’s that it will
market as its “Kentucky” line for its shrimp
farming customers.
If AMI needs more than
1,000 pairs per year, then AMI will pay SyAqua
$65.00 per Breeder.
f. AMI may sell the “Kentucky” PL’s to any
shrimp farming customer in North America and
the EU. AMI may not sell any “Kentucky” PL's
to any customer who operates a hatchery.
g. AMI requires that all customers of the
“Kentucky” line PL's sign an agreement that
limits their ability to use the PL’s for
growout purposes only.
(Id., p. 20.)

The allegations in Counts I through IV clearly

could have been brought as claims for breach of the Production
Agreement, which covers intentional disclosure of confidential
information

or

competitive

activity,

“willful

conduct

.

.

.

injurious to a party to the Agreement, monetarily or otherwise,”
- 6 -

Case 2:20-cv-00711-JES-MRM Document 65 Filed 07/19/21 Page 7 of 7 PageID 603

false and disparaging claims about one another, and the limitation
of customers of the “Kentucky” line for grow out purposes only.
The claims originate from the performance of the contract, and the
Production Agreement provides a basis for termination that covers
the factual allegations in Counts I through IV.
Claims

of

unfair

competition

and

theft

of

confidential

information clearly “arise out of” the terms and performance of
the Production Agreement, and therefore a jury demand is deemed
waived as to Counts I through IV, and all counts.
Accordingly, it is hereby
ORDERED:
Defendant's Motion to Strike Plaintiff's Jury Demand (Doc.
#49) is GRANTED and the Demand for Jury Trial (Doc. #46) is
stricken.

The Clerk shall reset this case as a bench trial.

DONE and ORDERED at Fort Myers, Florida, this
of July 2021.

Copies:

Counsel of Record

- 7 -

19th

day