FIL ED U.S. COURT OF APPEAL S EL EVENTHCI RCUI T J ULY 8, 2011 J OHN L EY CL ERK [PUBLIS H] IN THE U

NITED STATE S COURT OF APPEALS FOR THE ELE VENTH CIRCUIT

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__ __ __ __ __ __ __ __ __ __ __ __ D.C. Dock etNo. 1 :0 9- cv -2 32 48 -PCH QUAIL CRUISES SHIP MANAGEMENT LT D., a co m pa ny inc or

po rat edun de r th e la ws o f th e Bah am as , ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll Pl ai nt iff - App el lant , vers us AGENCIA DE VIAGENS CVC TUR LIMI TADA, a co m pa ny inc or

po rat edun de r th e la ws o f Bra zi l, VALTER PATRIANI, an i nd iv idua l re si di ng inBraz il , SEAHAWK NORTH AMERICA, LLC, a Flo rid a co rp or at io n, RODOLFO SPINELLI, an i nd iv idua l re si di ng inFlo rid a, LLOYD'S REGISTER NORTH AMERICA, INC., a Dela ware co rp or at io n, ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll Defen da nt s - Ap pe ll ees .

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__ __ __ __ __ __ __ __ __ __ __ __ D.C. Dock etNo. 1 :0 9- cv -2 32 48 -PCHQUAIL CRUISES SHIP MANAGEMENT LT D.,

a co m pa ny inc or

po rat edun de r th e la ws o f th e Bah am as , ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll Pl ai nt iff - App el le e, vers us AGENCIA DE VIAGENS CVC TUR LIMI TADA, a co m pa ny inc or

po rat edun de r th e la ws o f Bra zi l, etal., ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll Defen da nt s, LLOYD'S REGISTER NORTH AMERICA, INC., a Del aware co rp or at io n, ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll ll Defen da nt- App el lant .

__ __ __ __ __ __ __ __ __ __ __ __ App eal s fr om

th e Uni te d S ta te s Di st ric t Co urt forth e So ut he rnDis tri ctof F lo rid a

__ __ __ __ __ __ __ __ __ __ __ __ (Jul y 8, 2 01 1) Befo re BARKETT an d WILSON, Circu itJu dg es , andWALTER, Dis tri ctJu dg e. * PER CURI AM: Qua il Cru is es Sh ip Man ag em en t Lt d. (“ Qua il ”) ap pe al s fr om th e d is tri ct co urt’s o rd er d is m is si ng it s amend edco m pl ai ntforlac k o f subjec t m at te r

Honora ble Donald E. Walter, United States District J udg e for the Western District of * L ouisiana, sitting by

designation. 2juri sd ic ti on . After care fu l re vi ew of

th e rec or d a ndth e p art ie s’ bri efs , andha vi ng 1 th e b en efi t o f or al arg um en t, we v acat e th e d is tri ctco urt’s o rd er an d re m an d fo r furth er p ro ceed in gs . I. BACKG ROUND Qua il , a cru is e sh ip op erat or , all eg edinit s amend edco m pl ai ntth atth e de fen da nt s co ns pi redto in du ce i t t o p ur ch as e th e M/ V Paci fic (“ ve ss el ”)— be tt er kn own as the ep on ym ou s Lo ve Bo atfro m it s t el ev is io n d ay s o f th e 1 97 0s an d 19 80 s— by fraudul en tl y

m is rep res en ti ng th e v es se l’s d et eri or at in g andde fect iv e co nd it io n. Qu ai l al le ge d t ha t the frau d was orc he st rat edby A ge nc iade Viag en s CVC Tur Lim it ad a (“ CVC”) , a to urop erat in g c om pa ny, andit s Pr es id en t Val te r Patria ni . Accor di ng to Quai l, CVC di rect edSeah awkNorth Am eri ca, LLC (“ Seah awk ”), a s hi p m an ag em en t co m pany sup erv is in g t he ve ss el ’s op erat io n, an d it s Pr es id en t Ro do lfo Sp in el li , to de fer re pa irs an d c on ceal th e v es se l’s co nd it io n. As a p artof t he co nc eal m en t ef fo rt, Se ah awkall eg ed ly infl ue nc edLlo y d’s Reg is te r NorthAm eri ca, In c. (“ LRNA”), a m ari ti m e cl as si fic at io n s oc ie ty, to pr ov id e fav or ab le in sp ect io ns an d c ert ify the ve ss el ’s seaworth in es s. Qu ai l fu rth er

We reviewde novo the district cour t’s dismiss al for la ck of subjec t matter jurisdiction, 1 construingthe complaint in the light most favor able to the plaintiff a nd acc eptingall well-pled fac ts alleg ed in the complaint as true . Sinaltrainal v. Coca- Cola Co., 578 F.3d 1252, 1260 (11th Cir. 2009). 3al le ge d t ha t, wh il e o ve rs eas , CVC an d S eah awkrep res en ta ti ve s m ad e se ve ral

frau du le ntmis rep res en ta ti on s re ga rd in g t he ve ss el ’s con di ti on . In re li an ce o n th os e rep res en tati on s, as well as t ho se m ad e b y LRNA, Quai l al le ge d t ha t i t pu rch as edth e st oc k s ha res of Tem pl et on Int ern at io na l In c. (“ Tem pl et on ”), the pr in ci pa l as se t o f whi chwas the ve ss el
. 2 Qua il bro ug htcla im s fo r: s ecu rit ie s fr au d u nd er § 10 (b ) of th e Sec ur it ie s Exc hang e Actof 1 93 4, 1 5 U.S.C. § 78 j(b), an d S ecu rit ie s an d Ex ch an ge Co m m is si on (“ SEC”) Rul e 1 0b -5 , 17 C.F.R. § 24 0.1 0b -5 ; m ari ti m e to rts of f rau d in th e in du cem en t, re ck le ss ne ss , andne gl ig en ce/ne gl ig en t m is rep res en ta ti on ; an d
co m m on law cl ai m s o f ci vi l co ns pi racy to c omm itfrau d i n t he in du cem en t, fraud in th e in du cem en t, an d b reac h o f fi du ci ary du ty. Quai l s ou gh t d am ag es for
ex te ns iv e rep ai r work t o t he ve ss el , lo ss of u se of t he ve ss el as apa ss en ge r cru is e sh ip , andin

jury to i ts rep ut at io n a s a c ru is e sh ip op erat or . The di stric t co urt d is m is se d Qu ai l’s am en de d c om pl ai ntforlac k o f subjec t
m at te r juri sd ic ti on . App lying th e Supr em e Co urt’s re cen t d eci si on inMo rri so n v . Nat’l Au st ral iaBan k Lt d., 5 61 U.S. __ , 13 0 S . Ct. 2 86 9 (2 01 0) , whi chhe ldth at§ 10 (b ) an d S EC Ru le 10 b- 5 d o n otap pl y ex tra te rri to ria ll y , th e d is tri ctco urt Quail purc hased Te mpleton from Flameck International, S.A., an entity controlled by 2 CVC. Flamec k is not a party to this l awsuit bec ause the share purcha se agree ment betwee n Quail and F lameck c ontained an a rbitration clause
. 4co nc lu de d t ha t i t l ack edfed eral qu es ti on juri sd ic ti on ov er the sec ur it ie s fr au d

cl ai m , bec au se Quai l fa il edto all eg e th atth e p ur ch as e o r sa le of t he Tem pl et on st oc k t oo k p la ce wi th in th e Uni te d S ta te s. The co urt al so co nc lu de d t ha t i t l ack ed 3 adm ira lty juri sd ic ti on ov er Qu ai l’s p ut at iv e m ari ti m e to rt c la im s. As a res ul t, the
co urt d ecl in edto ex erci se supp le m en ta l juris di ct io n o ve r Qua il ’s comm on law cl ai m s. See 28 U.S.C. § 1 36 7( c)(3 ). It the n d is m is se d a s m oo t b ot h P atria ni ’s pe nd in g m ot io n t o d is m is s fo r la ckof p ers on al juri sd ic ti on an d LRNA’s p en di ng m ot io n t o d is m is s fo r im

pr op er v enue ba se d o n afor um -s el ect io n c laus e. Quai l ap pe al s the di sm is sa l o f it s amend edco m pl ai nt , andLRNA cro ss -ap pe al s the
co nc om it an t d en ia l (a s m oo t) o f it s m ot io n t o d is m is s fo r im pr op er v enue . II . DISCUSSI ON W e b eg in ou r an al y si s wi th Quai l’s cl ai m forsec ur it ie s fr au d, b ro ug ht pu rs ua ntto § 1 0( b) of t he Secu rit ie s Ex ch an ge Act an d S EC Ru le 10 b- 5. Th e Supr em e Co urt i n M orris onrece nt ly exam in edth e te rri to ria l s co pe of § 10 (b ) an d, by ext en si on , Rul e 1 0b -5 . Afterho ld in g tha t § 10 (b ) do es no t ap pl y 4 Despite dismissing this claim for la ck of subjec t matter jurisdiction, the court c orre ctly 3 rec ognized elsewher e in its order that, under Morrison, this i ssue of e x trater ritoriality g oes only to the ability

to state a c laim, not subject matter jurisdiction. 130 S. Ct . at 2876–77. Nonethele ss, the district court conc luded that it “lack[ed] subject matter jurisdiction over this litigation.” Section 10(b) make s it unlawful “[t] o use or e mploy , in connec tion with the purchase or 4 sale of a ny security reg istered on a

national sec urities exchang e or a ny security not so reg istered, 5ex tra te rri to ria ll y , id . at 2 87 7– 28 83 , th e Co urt d el in eat edth e sc op e o f § 1 0( b) ’s

do m es ti c ap pl ic at io n. Em ph as iz in g t ha t the foc us of t he st atut e was on pu rch as es an d s al es oc cu rri ng withi n t he Uni te d S ta te s, the Co urt ad op te d abri gh t-l in e

“ tra ns act io na l t es t.” Id . at 2 88 4– 86 . Spe ci fic al ly, th e Co urt h el d t ha t, re ga rd le ss of whet he r th e und erl y in g fr au du le ntco nduc t o ccu rs inor a ffec ts th e Uni te d St at es , § 1 0( b) ap pl ie s o nl y wher e th e se cu rit y

at i ss ue is li st edon a do m es ti c st oc k
ex ch an ge or, i f no t s o l is te d, wh ere “ it s p ur ch as e o r sa le is m ad e in th e Uni te d St at es .” Id. at28 86 ; s ee i d. at28 78 –8 1, 2 88 4– 88
. Inth is cas e, th ere i s n o d is pu te th atth e Tem pl et on st oc k was no t l is te d o n a do m es ti c st oc k e xc ha ng e, an d s o t he on ly iss ue un de r Mo rri so n i s wh ethe r th e

“pu rch as e o r sa le ” o ccu rredinth e Uni te d S ta te s. Th e d is tri ctco urt re adQuai l’s
am en de d c om

pl ai ntas a ll eg in g o nl y

th atth e p art ie s i nt en de d the clo si ng to oc cu r in th e Uni te d S ta te s. Ho wev er, Qu ai l cl earl y all eg ed(an d we m

us t ac cep t as tru e) th at“ [t]he tra ns act io n fo r th e acqui si ti on of t he Tem pl et onst oc k c lo se d i n M ia m i,

or any securities-based swa

p agree ment . . . , any

manipulative or de ceptive de vice or contrivanc e in contrave ntion of such rules a nd regulations as the Commiss ion may presc ribe a s nece ssary

or appropriate in the public intere st or for the pr otection of investors.”15 U.S.C. § 78j(b). SEC Rule 10b-5 makes it “unla wful for any person, dire ctly

or indirec tly , by

the use of a

ny means or instrumentality

of interstatecommerc e, or of the mails or of a

ny fac ility of any national sec urities exchang e,” to c ommit fraud “in conne ction with the purcha se or sa le of a ny security .” 17 C.F.R. § 240.10b-5. B eca

use Rule 10b-5 “ was promulg ated unde r § 10(b) , and does not e x tend beyond conduct e ncompassed by

§ 10(b)’ s prohibition,” its t erritorial rea ch does not e x tend beyond that of § 10(b) . Morrison, 130 S. Ct. at 2881 (citation omitt ed). 6Fl or id a o n J un e 1 0, 2 00 8, b y m ean s o f th e p art ie s s ub m it ti ng th e st oc k tran sf er do cu m en ts by exp res s co ur ie r in to th is Dis tri ct. . . .” Am en d. Co m pl . ¶ 66 . Thu s, Qua il all eg edth atth e cl os in g a ctua ll y oc cu rredinth e Uni te d S ta te s, an d i t was he re tha t “ th e tr an sa ct io n [wa ]s con su m m at ed .” Bla ck ’s Law Dict io na ry 29 1 (9 th ed . 20 09 ) (d efi ni ng “ cl os in g” ). Ind eed , th e p ur ch as e an d s al e ag reem en t co nf irms th atitwas n otun ti l thi s d om es ti c cl os in g t ha t t it le to th e sh ares was tran sf erre d t o Qua il
. By

de fin it io n, tha t tran sf

er o f ti tl e co ns ti tu te d asal e. See i d. at14 64 5 (d efi ni ng “ sa le ” as , in te r al ia , th e “ tra ns fer o f pr op erty or t it le for

a pr ic e”). Gi ve n th atth e Supr em e Co urt i n M orris on de li be rat el y est ab li sh eda br ig ht -li ne tes t ba se d e xc lu si ve ly on the lo cat io n o f th e p ur ch as e o r sa le of t he sec ur ity , we can no t sa y at t hi s s ta ge inth e p ro ceed in gs th atth e al le ge d t ran sf er o f ti tl e to th e sh ares in th e Uni te d S ta te s l ie s b ey on d § 10 (b )’s te rri to ria l re ach . Accor di ng ly, we co nc lu de th atth e d is tri cterre d b y di sm is si ng Quai l’s cl ai m on th is ba si s. Ourpre se ntin qu iry needgo no furth er. Altho ug h Qu ai l al so ch al le ng es on ap pe al th e d is tri ctco urt’s co nc lu si on th atitlac ke d a dm ira lty juri sd ic ti on ov er Qua il ’s pu ta ti ve m ari ti m e to rt c la im s, we fi nditun ne ces sa ry to ad dr es s tha t i ss ue atth is jun ctur e. Becaus e th os e cl ai m s fo rm “pa rt o f th e sa m e cas e o r co nt ro ve rs y ” Although w e ordina

rily consider only

the fa ce of

the complaint and doc uments attache d 5 there to when ana ly

zing a motion to dismi ss, we conside r the a gree ment here beca use Qua il refe rs to it in the complaint, it is centra l to Quail’s claim, its contents are not in disput e, and the defe ndants attac hed it to their motion to di smiss. S ee F in. Sec. Assur. I nc. v. Stephens, Inc., 500 F.3d 1276, 1284 ( 11th Cir. 2007). 7as Quai l’s s ecu rit ie s fr au d c la im , th e d is tri ctco urt h as , at the ve ry lea st , supp le m en ta l juris di ct io n o ve r th os e cl ai m s. 2 8 U.S.C. § 13 67 (a); see Mu rp hy v. Fl a. Key s El ec. Co -o p. As s’n, In c., 32 9 F .3d13 11 , 13 19 (11 th Cir . 20 03 ) (“ A
m ari ti m e to rt c la im

m ay be ass ert edinfed eral co urt wi th ou t i nv ok in g t he co urt’s adm ira lty juri sd ic ti on if the cla im

fal ls withi n the co urt’s s up pl em en ta l juri sd ic ti on .”). The s am e is tru e o f Qua il ’s rel at edco m m on law cl ai m s. II I. CONCLUSI ON Fo r th e fo reg oi ng reas on s, we v acat e th e d is tri ctco urt’s o rd er d is m is si ng Qua il ’s am en de d c om

pl ai ntan d re m an d fo r fu rth er p ro ceed in gs co ns is te ntwith th is op in io n. To be cle ar, we v acat e th e co urt’s o rd er i n i ts en ti rety , in cl ud in g i ts de ni al (as m oo t) o f Patria ni ’s m ot io n t o d is mis s fo r la ckof p ers on al juri sd ic ti on an d LRNA’s m ot io n t o d is m is s fo r im pr op er v enue , as t ho se de ni al s wer e

6 pr em is edon th e co urt’s erro ne ou s co nc lu si on th atitlac ke d s ub ject m atte r juri sd ic ti on ov er the cas e. VACATED AND REMANDED.

This disposit ion rende rs LRNA’s cr oss-appe al moot. 6 8