Helix Investment Management, SLP v. Privilege Direct Corp. et al

Filing 98

ORDER: The parties should be prepared to discuss the jurisdictional issue raised above at the December 18, 2018, preliminary injunction hearing. See Order for details. Signed by Judge Virginia M. Hernandez Covington on 12/17/2018. (KAK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
HELIX INVESTMENT MANAGEMENT, LP,
Plaintiff,
v.

Case No. 8:18-cv-206-T-33AEP

PRIVILEGE DIRECT CORP., ET AL.,
Defendants.
______________________________/
ORDER
This cause is before the Court sua sponte.

“A federal

court not only has the power but also the obligation at any
time to inquire into jurisdiction whenever the possibility
that

jurisdiction

does

not

exist

arises.”

Fitzgerald

v.

Seaboard Sys. R.R., Inc., 760 F.2d 1249, 1251 (11th Cir.
1985); Hallandale Prof’l Fire Fighters Local 2238 v. City of
Hallandale, 922 F.2d 756, 759 (11th Cir. 1991)(“Every federal
court operates under an independent obligation to ensure it
is presented with the kind of concrete controversy upon which
its constitutional grant of authority is based.”).
Moreover,

federal

courts

are

courts

of

limited

jurisdiction. Taylor v. Appleton, 30 F.3d 1365, 1367 (11th
Cir. 1994). And “because a federal court is powerless to act
beyond its statutory grant of subject matter jurisdiction, a
court must zealously [e]nsure that jurisdiction exists over a

case, and should itself raise the question of subject matter
jurisdiction at any point in the litigation where a doubt
about jurisdiction arises.”

Smith v. GTE Corp., 236 F.3d

1292, 1299 (11th Cir. 2001).
Diversity Jurisdiction
Plaintiff

Helix

Investment

Management,

SLP

filed

a

Motion for Preliminary Injunction on December 4, 2018, (Doc.
# 91) and filed its Third Amended Complaint on December 10,
2018. (Doc. # 95). Plaintiff predicates the Court’s subject
matter jurisdiction on complete diversity of citizenship. A
hearing on the Motion for Preliminary Injunction is scheduled
to

take

place

before

the

Honorable

Anthony

E.

Porcelli,

United States Magistrate Judge, on December 18, 2018. (Doc. #
96).

Defendants’ response to the Third Amended Complaint is

due on December 24, 2018.
On

December

11,

2018,

Defendants

Oliphant

Financial

Group, LLC, Oliphant Financial Corporation, and Robert A.
Morris

filed

Preliminary

a

Response

Injunction.

in

Opposition

(Doc.

#

97).

to

the
In

Motion
addition

for
to

contesting Plaintiff’s entitlement to injunctive relief, the

2

Oliphant

Defendants

assert

that

this

Court

lacks

subject

matter jurisdiction over the case.
The Oliphant Defendants correctly explain that “where
there are aliens on both sides of the litigation, complete
diversity is lacking, and diversity jurisdiction does not
exist.” (Id. at 3).

In Simon Holdings PLC Group of Companies

U.K. v. Klenz, 878 F. Supp. 210 (M.D. Fla. 1995), the court
explained:
jurisdiction

“Federal
in

district

actions

between

courts
citizens

have
of

‘alienage’
a

State

citizens of foreign states. 28 U.S.C. § 1332(a)(2).

and

In order

to maintain an action in federal court based on ‘alienage’
jurisdiction, there must be complete diversity of citizenship
between all the plaintiffs and all the defendants.” Id. at
211.

And, “complete diversity of citizenship does not exist

where there are aliens on both sides of the litigation. This
is so even if the aliens are from different countries.” Id.
See also Palmer v. Loiten, No. 6:08-cv-1040-Orl-22GKJK, 2010
WL

11507691,

at

*4

(M.D.

Fla.

June

22,

2010)(dismissing

action for lack of subject matter jurisdiction when one of
the

plaintiffs

was

incorporated

3

in

Panama,

one

of

the

defendants was a citizen of Jamaica, and the second defendant
was incorporated in the Grand Cayman Islands).
Plaintiff’s Third Amended Complaint alleges that Helix
is

a

Luxembourg

corporation

with

its

principal

place

of

business in Luxembourg. (Doc. # 95 at ¶ 8). Thus, Plaintiff
is an “alien.”

As for Defendant Privilege Direct Corp., the

Third

Complaint

Amended

corporation
United

with

Kingdom.

its
(Id.

alleges

principal
at

¶

that

place

9).

The

it
of

is

a

Florida

business

Oliphant

in

the

Defendants,

however, have filed documents from the Florida Division of
Corporations

showing

dissolved

September

on

that
28,

Privilege
2018,

Direct

eight

Corp.

months

after

was
the

initial complaint was filed in this case. (Doc. # 97-1).
Thus, the Oliphant Defendants argue: “Since Privilege Direct
Corp. is no longer an active Florida corporation, and its
principal

place

Privilege

of

Direct

business

Corp.

is

is
an

in

the

‘alien’

United

Kingdom,

corporation

for

diversity purposes.” (Doc. # 97 at 4).
In Simon, the court held: “diversity jurisdiction does
not

exist

where

a

foreign-chartered

corporation

with

its

principal place of business in the United States is on the

4

opposing

side

of

litigation

from

another

alien.”

Simon

Holdings PLC Grp. of Companies U.K., 878 F. F. Supp. at 213.
That holding was reiterated in National Westminster Bank PLC
v. Plumb, 6:10-cv-310-Orl-18GJK, 2010 WL 11626731 (M.D. Fla.
Nov.

8,

plaintiff

2010),
from

defendants.

a
the

personal
United

guaranty

Kingdom

case

against

brought
two

by

a

individual

The plaintiff bank alleged in the complaint that

the two defendants resided in the United States, but copies
of

their

passports

that

the

defendants were actually citizens of the United Kingdom.

The

Court

the

dismissed

the

and

case

other

and

evidence

showed

specifically

disallowed

filing of an amended complaint to cure the jurisdictional
defect.

The court explained: “the presence of an alien on

both sides of a case destroys diversity jurisdiction.” Id. at
*2.
Similar to the plaintiff in National Westminster Bank
PLC, Helix is an alien (a citizen of Luxembourg).

Therefore,

“diversity depends on the citizenship of the [Defendants].”
Id.

At this juncture, Privilege Direct Corp. is not an

active Florida corporation. But, a party’s citizenship is
determined at the inception of the lawsuit, not at a later

5

time. See Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S.
567,

571

(2004)(“It

has

long

been

the

case

that

the

jurisdiction of the court depends upon the state of things at
the time the action is brought. This time-of-filing rule is
hornbook

law

(quite

literally)

taught

to

first-year

law

students in any basic course on federal civil procedure.”).
Assuming that Privilege Direct is a Florida corporation
with its principal place of business in the United Kingdom,
Helix

has

still

raised

a

substantial

question

regarding

whether the requirements of complete diversity of citizenship
have been met.

On December 13, 2018, the Eleventh Circuit

entered a detailed order addressing diversity jurisdiction
with aliens on both sides of the case.

In Caron v. NCL

(Bahamas), Ltd., No. 17-15008, 2018 WL 6539178 (11th Cir.
Dec.

13,

2018),

the

court

evaluated

whether

diversity

jurisdiction was present in a negligence action brought by an
injured passenger (a citizen of Canada) against the cruise
line

(a

Bermuda

corporation

business in Florida).
requirements

of

with

its

principal

place

of

The district court found that the

complete

diversity

were

present,

but

the

Eleventh Circuit disagreed and held: Ҥ 1332(a)(2) does not

6

grant

jurisdiction

over

a

suit

between

a

corporation

incorporated solely in a foreign state and another alien,
regardless of the corporation’s principal place of business.”
Id. at *3.
However,

that

case

did

not

address

the

situation

presented here - a defendant incorporated in Florida, with
its principal place of business abroad.

In Cabalceta v.

Standard Fruit Co., 883 F.2d 1553, 1561 (11th Cir. 1989), the
court held that a defendant’s “Latin American principal place
of business would not destroy diversity jurisdiction against
alien Plaintiffs” because the defendant was incorporated in
Florida. Id. The recent Caron case left the door to this
discussion open by stating: “We are not required to decide,
and do not decide, whether a corporation incorporated in a
State, but with its worldwide place of business aborad, can
invoke alienage-diversity jurisdiction in a suit against an
alien.

This court held in Cabalceta that alienage-diversity

jurisdiction was proper in that circumstance. Whether the
2012 amendments to § 1332 overruled Cabalceta is a question
for another day.” 2018 WL 6539178, at n.3.

7

In an abundance of caution, the Court outlines these
jurisdictional issues and encourages the parties to elaborate
upon them during the hearing set to take place before the
Magistrate Judge on December 18, 2018.
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
The

parties

should

be

prepared

to

discuss

the

jurisdictional issue raised above at the December 18, 2018,
preliminary injunction hearing.
DONE and ORDERED in Chambers in Tampa, Florida, this
17th day of December, 2018.

8