1 RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 14a0101p.06 

### UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

_________________

A LAN C. C ARTWRIGHT , Plaintiff-Appellant ,

v

.

A LAN L. G ARNER , et al., Defendant-Appellee

. ┐ │ │ │ │ │ │ │ ┘ No. 12-6314

Appeal from the United St ates District Court for the Western District of Tennessee at Memphis. No. 2:12-cv-01025—Jon Phipps McCalla, District Judge. Argued: July 25, 2013 Decided and Filed: May 16, 2014 Before: BOGGS and SILER, Circuit Judges; DOWD, District Judge. *

_________________ COUNSEL

ARGUED: Justin E. Mitchell, THOMAS ON, HENDRIX, HARVEY, JOHNSON & MITCHELL, Memphis, Tennessee, for Appella nt. David Wade, MA RTIN, TATE, MORROW & MARSTON, P.C., Memphis, Tennessee, for Appellees. ON BRIEF: Justin E. Mitchell, Jerry E. Mitchell, THOMASON, HENDRIX, HAR VEY, JOHNSON & MITCHELL, Memphis, Tennessee, for Appellant. David Wade, A ndrew Gardella, MARTIN, TATE, MORROW & MARSTON, P.C., Memphis, Tennessee, for Appellees.

* The Honorable David D. Dowd, Jr., Un ited States District Judge for the Northern District of Ohio, sitting by designation. 

### >No. 12-6314 Cartwright v. Garner, et al. Page 2

_________________ OPINION

_________________ DOWD, District Judge. The parties in this case have been engaged for years in multiple lawsuits in multiple jurisdictions concerning trus ts that were established by James Cartwright before his death. An understanding of both the background facts and litiga tion history is useful to understanding the issues presen tly before the court on appeal.

I. BACKGROUND A. The Parties Plaintiff-appellant Alan C. Cartwright (“Alan Cartwright”) is the adopted son of James Cartwright and Betty Goff Cartwr ight. Alan Cartwright is the beneficiary of several trusts established by his adoptive parents, and issues surrounding those tr usts are the su bject of this litigation.
Alan Cartwright’s sister, de fendant-appellee Alice Cartwright Garner, is also adopted and also the beneficiary of several tr usts established by James Cartwrig ht and Betty Goff Cartwright. Defendant-appellee Alan Garner is Alice Cartwright Garner’s husband.
Several legal entities are also defendants-appellees in this case. The role of these parties is better understood in the context of the trusts at issue in this case, which is explained below. The trusts themselves are not parties to this action.

B. The Trusts Plaintiff-appellant’s father, James Cartwright , was an attorney, entrepreneur, and investor who established a number of trusts for the benefi t of his two children, Alan Cartwright and Alice Cartwright Garner. All of the trusts in which plaintiff has a beneficial interest are Tennessee trusts governed by the laws of the State of Tennessee.
According to the complaint Alan Cartwright filed in the district court below, “Alan C. Cartwright did not possess the same powerful inte llect of his adoptive father” and he graduated from boarding school “without distinction or a subs tantial education.” Ja mes Cartwright soughtNo. 12-6314 Cartwright v. Garner, et al. Page 3

to ensure that his son, Alan Cartwright, would be provided with lifetime support and income through a trust mechanism limiting Alan Cartwright’s access to funds outside of trust protection.
Towards this end, Alan Cartwright as settlor, and his father as trus tee, entered into the Alan Cook Cartwright (ACC) Grantor Trust agreem ent. The language of the ACC Grantor Trust reflects Alan Cartwright’s parents’ desire to lim it his access to funds that were not protected by a trust. Specifically, the ACC Gran tor Trust states that Alan Cart wright “is not experienced in financial matters” and that the trust needs “to provide for his personal financial security by preserving his property against hi s own spend thrift actions.”

The ACC Grantor Trust was amended seve ral times during the lifetime of the ACC Grantor Trust trustee, James Cartwright. After James Cartwright’s death, the ACC Grantor Trust was further amended by Alan Cartwright, as settlo r, and Betty Goff Cartwright, as trustee. Alice Cartwright Garner is the sole trustee of the ACC Grantor Trust since the death of Betty Goff Cartwright in 2005; however, in th is case she has not been sued by her brother in her capacity as
a trustee.
Alan Cartwright is the life beneficiary of the ACC Grantor Trust. He is also the beneficiary of several trus ts established by his father known as “Crummey Trusts.” 1 The ACC Grantor Trust and the Crummey Trusts provide for distributions of a certai n percentage of trust income each year to Alan Cartwright.
Alan Cartwright and his sister Alice Cartwright Garner are also the beneficiaries of two trusts created from the after-tax residue of the James B. Cartwright Marital Trust No. 1 and No.
2. 2 These trusts also provide for periodic distributi ons to the beneficiaries. The various trusts of which plaintiff is a beneficiary re levant to this action will be co llectively referred to as “the
trusts.”

1 The name “Crummey Trust” is derived from a tax case which recognized the validity of a certain trust structure.

2 The James B. Cartwright (JBC) Revocable Trust prov ided for the creation of Marital Trust No. 1 and Marital Trust No. 2, to which Alan Cartwright and Alice Cartwright Garner are residual beneficiaries. In an amendment to the JBC trust, James Cartwright proclaimed at paragraph 9 that “No person shall have the power to remove my daughter, Alice Cartwright Garner, as Trustee of any trust created herein” and that “My son, Alan Cook Cartwright, shall have no power to participate, whether for himself or as the lawful guardian of any beneficiary, in any determination to remove any Trus tee of any trust created herein.”No. 12-6314 Cartwright v. Garner, et al. Page 4

As part of their estate planning, the Cartwright family established family limited partnerships. The trusts are limited partners of defendant Jackson Capital Partners, LP (“JCP”). Plaintiff does not disput e that the trust documents permit the trustees to invest trust assets in family limited partnerships.
Defendants Alan Garner and Alice Cartwright Garner are also limited partners of JCP, as well as the only partners of de fendant Jackson Capital Manageme nt, LLC (“JCM”), which is the general partner of JCP. Alan Cartwright is not a limited partner of JCP. Plaintiff claims that defendants Alice Cartwright Garn er and Alan Garner are the exclusive owners of defendant FSTW, LLC, to which plaintiff Alan Cartwright alleges assets from the trusts have been wrongfully diverted.

C. The Tennessee state court actions Several years of litigation involving the Ca rtwright trusts preceded the federal-court action now before us. In order to analyze the issues on appeal, it is necessary to review the Tennessee state court actions and rulings rendered be fore Alan Cartwright filed his federal case.
1. Shelby County Chancery Court action
The state court litigation ove r the various Cartwright trus ts began in June 2004 with a lawsuit filed by Betty Goff Cartwright (Ala n Cartwright’s mother) in the Shelby County Chancery Court in Tennessee against Alan Cartwr ight, Alice Cartwright Garner, Alan Garner, and others. Betty Goff Cartwright’s complaint challenged the family tax-planning structure put in place by her and her husband, James Cartwright, before his death. Betty Goff Cartwright was 84 at the time. She died in 2005, and the defendants settled her estate’s claims.
In December 2004, before Betty Goff Cartwright died and her claims were settled, Alan Cartwright filed a cross-claim in the Shelby County Chancery Court action against JCM, JCP, Alice Cartwright Garner, and Alan Garner. In his cross-claim, Al an Cartwright sought to have the trustees of the trusts of which he is a life beneficiary replaced and the family’s limited partnership dissolved. Alan Ca rtwright continued to pursue his cross-claim after Betty Goff Cartwright’s claims were settled and dismissed.No. 12-6314 Cartwright v. Garner, et al. Page 5

2. Shelby County Circuit Court action
Later in October 2007, Alan Cartwright filed a new, separate action in the Shelby County Circuit Court sounding in tort against all of the defendants in the Chancery Court action. In the Circuit Court lawsuit, Alan Ca rtwright alleged that the de fendants conspired to convert plaintiff’s trust funds to their own benefit, wrongfully depriv e him of his property, and use defendant JCP as a vehicle to convert plaintiff’ s trust funds for defendants’ own benefit. The Shelby County Circuit Court transferred the Circui t Court action to the Chancery Court, finding that the Chancery Court ac tion was a related action.
3. Shelby County Chancery Court action afte r transfer of Ci rcuit Court action
Alan Cartwright’s Tennessee Circuit Court case was transferred to the Chancery Court, whose judge could hear the cas e by designation as a Circuit Court judge. However, the Chancery Court, finding that the Chancery Court and Circuit Court cases “both [arose] out of the same subject matter, that is, claims of breach of fiduciary duties in the context of administration of certain trust obligations created by written trust instrument and involve the same parties,” 3
dismissed the transferred Circuit Court action wit hout prejudice and allowed Alan Cartwright to amend his cross-claim in the pending Chancery Cour t action to include his tort allegations from the Circuit Court action.
With leave of court, Alan Cartwright ame nded his cross-complaint in the Chancery Court to include the tort claims from his Circuit Cour t case. Discovery battles ensued. The Chancery Court ultimately bifurcated Alan Cartwright’s in adequate distribution and breach of fiduciary duty claims from his tort claims of conspiracy, self dealing, and manipula tion of trust fund assets to his detriment.
Alan Cartwright then filed two motions for partial summary judgment in the Chancery Court. Cross-defendants also moved for summ ary judgment, arguing that the trustees had complied with the trust documents and that Alan Ca rtwright had received a ll of the distributions

3 Chancery Court dismissal order, found in the district court record in document 19-2, Page ID # 128-29.No. 12-6314 Cartwright v. Garner, et al. Page 6

required by the trust documents, and therefore the trustees could not be in violation of their fiduciary duties.
The Chancery Court denied Alan Cartwright ’s motions and granted the cross-defendants’ motion for summary judgment. After the Chancer y Court ruled, Alan Cartwright voluntarily dismissed without prejudice the tort claims in his amended cross-claim, “which included all of the tort allegations first raised in the 2007 Ci rcuit Court complaint and which are now included as part of the Complaint in this [case],” 4 and appealed the Chancery Court’s summary-judgment ruling in favor of cross-defendants.

D. District Court Action
While Alan Cartwright’s appeal of the Chancery Court’s decision was pending, he filed the action in the United States District Court for the Western Di strict of Tennessee that is now before this panel on app eal. As described by pl aintiff-appellant in his appellate brief, “[t]his [federal] lawsuit deals specifically with the allega tions that were [voluntarily dismissed] from the Chancery Court in 2011” with the add ition of a new defendant, FSTW, LLC. 5
1. The Complaint In his district court complaint, plaintiff Alan Cartwright alleges various tort claims against the defendants, including conversion, misr epresentation, mismanagement, and conspiracy with respect to trust assets and hi s distributions therefrom. At th e core of plaintiff’s claims of conversion and mismanagement is the investment of his trust assets in the family limited partnership Cartwright-Garner In vestment, subsequently restruct ured as defendant JCP. The trusts are limited partners in th e defendant JCP, as are Alice Cart wright Garner and Alan Garner. According to plaintiff’s complaint, investment of the trust assets in JCP diminished both the value of those assets and his di stributions from the trusts.
Alice Cartwright Garner and Al an Garner are trustees and/or co-trustees of the trusts at issue in this case. However, plaintiff’s federal claims against Alice Cartwright Garner and Alan

4 See Appellant’s brief, Document 006111590272, p. 13, par. 11.

5 See Appellant’s brief, Document 006111590272, p. 16, par. 6.No. 12-6314 Cartwright v. Garner, et al. Page 7

Garner are made against them in their capacity as partners of defendant JCP, and as owners of defendant JCM and defendant FSTW, to which plaint iff alleges trust assets have been diverted. The trusts and trustees are not na med as defendants in th is case. Plaintiff claims that the assets of the trusts have been manipulated, misman aged, and wrongfully diverted by the defendant partnerships and limited partners.

2. Defendants’ motion to di smiss district court action Defendants moved to dismiss plaintiff’s district court-action on multiple grounds. Relevant to this appeal is defendants’ motion to dismiss plaintiff’s complaint for lack of subject matter jurisdiction on the basis that the Tennessee state court first exerci sed jurisdiction over the property at issue before the district court, a nd because both the district court action and the Tennessee state court proceedings are quasi in rem. Alternatively, defendants moved to dismiss for lack of diversity, failure to join necessary and indispensable parties, and under the doctrine of abstention.
3. District Judge McCalla grants defendant s’ motionto dismiss for lack of subject matter jurisdiction

At the time defendants moved to dismiss fo r lack of subject matter jurisdiction, the Tennessee Court of Appeals had not yet ruled on plaintiff Alan Cartwri ght’s appeal of the Chancery Court’s decision in favor of defendants. After defenda nts’ motion was fully briefed, District Judge McCalla conduc ted a telephonic hearing.
By the time of the telephoni c hearing, the Court of App eals of Tennessee had ruled on Alan Cartwright’s appeal of the Chancery Co urt’s grant of defendants’ motion for summary judgment. In ruling on the appeal, the Tennessee C ourt of Appeals affirmed in part, reversed in part, and remanded to the Chancery Court for fu rther proceedings on Alan Cartwright’s claim that Alice Garner exerted undue influence over him when he signed several amendments to the ACC Grantor Trust, which Alan Cartwright claims reduce the distribution that he receives from the trusts. At the time Distri ct Judge McCalla ruled on defenda nts’ motion to dismiss, Alan Cartwright’s claim of undue influence was pending on rema nd before the Shelby County Chancery Court.No. 12-6314 Cartwright v. Garner, et al. Page 8

District Judge McCalla grante d defendants’ motion to dismiss for lack of subject matter jurisdiction on the basis of the “well established” rule articulated by the Princess Lida doctrine that in actions that are in rem or quasi in rem, if a state court first asserts jurisdiction over the property at issue in a claim subse quently filed in federal court, the state court may maintain and exercise its jurisdiction over that property to the exclusion of the federal court. Princess Lida of Thurn & Taxis v. Thompson , 305 U.S. 456, 466 (1939); Jacobs v. DeShelter, 465 F.2d 840, 842- 43 (6th Cir. 1972) (quoting Princess Lida , 305 U.S. at 466); Gillis v. Keystone Mut. Cas. Co., 172 F.2d 826, 829 (6th Cir. 1949) (characterizing the doctrine as “well established”).
District Judge McCalla found that both stat e and federal court ac tions allege claims involving administration of the trusts and are quasi in rem. Further, the district court found that the Chancery Court’s jurisdiction over the Sh elby County action was a sserted pursuant to Tennessee state law, Tenn. Code § 35-15-203, and that the Chancery Court first asserted jurisdiction over the property at issue in both th e state and federal actions. As a consequence, District Judge McCalla concluded that he lack ed subject matter jurisdiction over plaintiff’s claims and that there was no need to address de fendants’ alternative arguments for dismissal.

II. THE APPEAL Plaintiff appeals District J udge McCalla’s ruling granting defendants’ motion to dismiss for lack of subject matter jurisdiction.

Plaintiff states the i ssue on appeal as follows:

Whether the District Court erred in its determination that the Shelby County, Tennessee Chancery Court established exclusive jurisdiction over the res of this matter as demonstrated by the procedural posture of an ac tion, now on remand from the Tennessee Court of Appeals, file d by Appellant’s mother Betty Goff C. Cartwright in Chancery Court in 2004 and joined thereafter by AppellantAlan C. Cartwright. Appellant acknowledges that he first brought his tort claims concerning partnership administration and malfeasance in the Circuit Court of Tennessee in 2007, but argues that he voluntarily dismissed those claims and contends that the Chan cery Court never had exclusive jurisdiction over those claims. At most, plaintiff maintains, when the Circuit Court transferredNo. 12-6314 Cartwright v. Garner, et al. Page 9

his tort claims to the Chancery Court, the Ch ancery Court had concurrent, but not exclusive, jurisdiction over the tort claims. 6
Appellant does not disagree with the application of the Princess Lida doctrine in cases where the court that first asserted jurisdiction n eeds control of the propert y to resolve the case properly, and agrees with the district court’s conclusion that the Chan cery Court should retain jurisdiction over actions against the trusts invo lved in the state court litigation. However, appellant contends that the Princess Lida doctrine does not apply to th is federal case because his claims do not involve trust admi nistration, are not dire cted against the trusts in the Chancery Court action, and are not directed against the Garners in their capac ity as trustees, but rather as individuals, partners, an d owners of defendant partnerships a nd corporations. Consequently, it is plaintiff’s position that his federa l tort action is in personam, a nd not in rem or quasi in rem. 7
Defendants state the issues on appeal as follows:

1. Whether the District Court er red in dismissing the District Court Trust Complaint for lack of subject matter jurisdiction under the Princess Lida doctrine. 2. Whether the Court, in the ex ercise of its sound discretion, should affirm the dismissal of the District Court Trust Complaint on any of the other bases asserted by the Trust Defendants in their Motion to Dismiss, but which the District Court did not addr ess in its Order Granting Defendants’ Motion to Dismiss. Defendants advance two arguments in support of their position that the district court correctly applied the Princess Lida doctrine in this case. First, defendants contend that, because plaintiff did not object below to defendants’ characterization of th e federal complaint as a quasi in rem action, plaintiff failed to preserve this issue on appeal and cannot now argue that the

6 Appellant’s brief omits some of the details of the transf er and voluntary dismissal of his tort claims. After plaintiff’s Tennessee Circu it court case was transferred to the Chancer y Court, the Chancery Court dismissed the Tennessee Circuit court case and granted plaintiff leave to amend his Chancery Court action to include the tort claims made in the Tennessee Circuit Court, which he did. After the Chancery Court ru led against plaintiff and in favor of defendants on some of plaintiff’s claims, Alan Cartwright then voluntarily dismissed his tort claims that were pending in the Chancery Court action.

7 The district court noted in its opinion dismissing plaintiff’s case for lack of subject matter jurisdiction that “Plaintiff offered no objection to Defe ndants’ characterization of the claims before the Chancery Court and this Court as quasi in rem.” Case No. 2:12 CV 1025, Western District of Tennessee, Document 32, Page ID # 701.No. 12-6314 Cartwright v. Garner, et al. Page 10

federal action is in personam. Second, plaintiff’ s federal action affects th e same property (trust funds) that was under the control of the Tennessee Chancery Court before pl aintiff’s federal case was filed, thus depriving the di strict court of jurisdiction.

III. APPLICABLE LAW A. Rule 12(b)(1) and Standard of Review On appeal, plaintiff challenges the district court’s a pplication of the Princess Lida doctrine as the basis for Rule 12(b)(1) dismissal of his federal case for lack of subject matter jurisdiction. The Princess Lida doctrine provides that in actions that are in rem or quasi in rem, if a state court first assumes jurisdiction over the property at issue in a cl aim subsequently filed in federal court, the state court maintains its juri sdiction over the property to the exclusion of the federal court, thereby depriving the fede ral court of subject matter juri sdiction.
Fed. R. Civ. P. 12(b)(1) provides for the dismi ssal of an action for lack of subject matter jurisdiction. A Rule 12(b)(1) motion for lack of subject matter jurisd iction can challenge the sufficiency of the pleading itse lf (facial attack) or the factual existence of subject matter jurisdiction (factual attack). United States v. Ritchie , 15 F.3d 592, 598 (6th Ci r. 1994). A facial attack goes to the question of whether the pl aintiff has alleged a basis for subject matter jurisdiction, and the court takes the allegations of the complaint as true for purposes of Rule 12(b)(1) analysis. Id

. A factual attack challenges the factual exis tence of subject matter jurisdiction. In the case of a factual attack, a court has broad discreti on with respect to what evidence to consider in deciding whether subject matter ju risdiction exists, including evid ence outside of the pleadings, and has the power to weigh the evidence and determ ine the effect of that evidence on the court’s authority to hear the case. Id. Plaintiff bears the burden of es tablishing that subject matter jurisdiction exists. DLX, Inc. v. Commonwealth of Kentucky , 381 F.3d 511, 516 (6th Cir. 2004).

We review de novo the district court’s decision to dismiss this case for lack of subject matter jurisdiction under Rule 12(b)(1). But “[w]he re the district court does not merely analyze the complaint on its face, but instead inquires in to the factual predicates for jurisdiction, the decision on the Rule 12(b)(1) mo tion resolves a ‘factual’ chal lenge rather than a ‘facial’No. 12-6314 Cartwright v. Garner, et al. Page 11

challenge . . . .” Lovely v. United States , 570 F.3d 778, 781-82 (6th Cir. 2009) (quoting Howard v. Whitbeck , 382 F.3d 633, 636 (6th Cir. 2004 )). Factual findings made by the district court are reviewed for clear error; however, the district court’s application of the law to the facts is reviewed de novo

. Lovely , 570 F.3d at 782 (citing RMI Titanium Co. v. Westinghouse Elec. Corp. , 78 F.3d 1125, 1135 (6th Cir. 1996)).
In this case, the district c ourt’s analysis in granting defe ndants’ motion to dismiss went well beyond a consideration of the complaint on its face. Therefore, th is panel reviews the district court’s factual determinations for clear error, but reviews de novo the district court’s application of the law to those factual determina tions. However, we note that plaintiff’s appeal does not really challenge the factual predicates of the district court decision, but focuses on the legal effect of those fact s in the context of the Ru le 12(b)(1) analysis.

B. Princess Lida Doctrine

Princess Lida presented the question to the Suprem e Court of the United States of “whether the exercise of jurisd iction by a state court over the admi nistration of a trust deprives a federal court of jurisdiction of a later suit involving the same subject matter.” Princess Lida , 305 U.S. at 457. In Princess Lida , Lida and her husband, Gerald, divorced. They reached an agreement by which Gerald would pay certain sums of money annually to th e trustees of a fund for the benefit of Lida and their children.
Gerald performed the agreement for a few year s and then repudiated the agreement. One of the trustees, Lida, and her children brought an acti on in state court in Pennsylvania seeking performance of the agreement by Gerald. The st ate court issued a decree ordering Gerald to pay as agreed and retained jurisdiction to enforce the continued performance of the agreement. Later, the trustees sought a modification of the decree, which was approved. About a decade later, the trustees acknowledged receipt of all sums due under the modified decree. In connection with the satisfaction of the decr ee, an accounting, and exceptions thereto, were presented in the state court action.
While these state court proceedings were underw ay, Lida and one of her children filed an action in the United States District Court for th e Western District of Pennsylvania against theNo. 12-6314 Cartwright v. Garner, et al. Page 12

trustees, alleging mismanagement of the trust funds and seeking the removal of the trustees and an accounting. The trustees moved to dismiss the federal action on the basis that the state court had exclusive jurisdiction over the controversy. Ultimately, both the fede ral and state courts claimed jurisdiction and enjoined the parties from proceeding in the other forum. In view of the “unusual state of affairs” and “the importance of the question involved,” the United States Supreme Court granted th e writ of certiorari.
After an analysis of the state court pr oceedings, the United States Supreme Court concluded that the state court in Pennsylvania properly had juri sdiction over the administration of the trust funds at issue, whic h included the various matters to be addressed in connection with the accounting filed in state court immediately pr eceding Lida’s filing of the federal action. With respect to the district court action, the Su preme Court observed that if both the state and federal courts proceeded with their actions, “the y would be required to cover the same ground.” Id . at 465.
However, the Supreme Court not ed that this determination alone is not conclusive with respect to the issue of the distri ct court’s jurisdiction because “it is well settled that where the judgment sought is strictly in personam, both the st ate court and federal cour t, having concurrent jurisdiction, may proceed . . . at least until judgment is obtained in one of them which may be set up as res judicata in the other.” Id. at 466. If the suits in federa l and state court are in rem or quasi in rem, however, it is a different matter. In such cases, the court must have some control over the property that is the subject of the litiga tion in order to grant relief, and “the jurisdiction of one court must yield to that of the other.” Id. (citing Penn General Casualty Co. v. Pennsylvania , 294 U.S. 189 (1935)).
The principle that the court first assumi ng jurisdiction over the property may maintain and exercise that jurisdiction is applicable to both state and federal courts, and is not limited to cases where the property has actually been seize d, but includes suits brought to marshal assets, administer trusts, or liquidate estates where the c ourt must control the prope rty to give effect to its jurisdiction. Id. “The doctrine is necessary to the ha rmonious cooperation of federal and stateNo. 12-6314 Cartwright v. Garner, et al. Page 13

tribunals.” Id. (citing United States v. Bank of New York & Trust Co. , 296 U.S. 463, 478 (1936)). 8
The Supreme Court found that the Pennsylva nia state court could not exercise its jurisdiction without some control over the trust funds, and that the proceedings in both state and federal court were quasi in rem. Accordingly, the Supreme Court concluded that the district court was without jurisdiction because the Pennsyl vania court first exercised jurisdiction over the administration of the trust funds at issue. Id. at 467-68.

IV. ANALYSIS If two suits are in rem or quasi in rem, so that the court must have possession or some control over the property in order to grant the relief sought, the jurisdiction of one court must yield to that of the other. Jacobs , 465 F.2d at 842-43 (citing Princess Lida , 305 U.S. at 466; Bank of New York & Trust Co. , 296 U.S. at 477-78); see also Ewald v. Citizens Fidelity Bank and Trust Co., 242 F.2d 319, 321-22 (6th Cir. 1957). This rule applies where the court first asserting jurisdiction needs some control over the property to resolve the case, such as in cases involving trust administration. Princess Lida , 305 U.S. at 466; Jacobs , 465 F.2d at 842 (quoting Princess Lida , 305 U.S. at 466).

A. Both the federal and stat e actions are quasi in rem The first question in determining whether the Princess Lida doctrine applies in this case to deprive the federal court of jurisdiction is wh ether the district court and Tennessee state court actions are quasi in rem. In the Shelby County Chancery Court ac tion, Alan Cartwright claims that his sister, defendant Alice Cartwright Ga rner, exerted undue influence over him when he signed certain amendments to the ACC Grantor trus t. These amendments, which plaintiff claims affect both the manner and amount of distributions ma de to him from the trusts, relate to trust administration. In suits involving trust administ ration, the court must control the property in order to give effect to the resolution of the case, and are quasi in rem. Princess Lida , 305 U.S. at 466-68.

8 This principle is also known as the doctrine of prior exclusive jurisdiction. See United States v. Sid-Mars Restaurant & Lounge, Inc. , 644 F.3d 270, 274-75 (5th Cir. 2011).No. 12-6314 Cartwright v. Garner, et al. Page 14

While plaintiff does not disput e that the Chancery Court action is quasi in rem, he claims that this federal action is in personam because hi s claims relate to partnership administration and not trust administration, and to the personal to rt malfeasance of the Garners. However, the allegations of plaintiff’s district court complaint asserted in support of his tort claims for fraud, mismanagement, and conversion belie the conclusi on that this federal ac tion is anything but a quasi in rem action regardi ng trust administration.
As repeatedly stated in his complaint, plainti ff is the beneficiary of the trusts at issue in this case even though the tr usts themselves are not parties. Pl aintiff’s tort claims begin with the placement of the trust assets into the Cartwright-Garner I nvestment Company, LP by Alan Cartwright’s mother, Betty Goff Cartwright, who was the trustee at the time. The CartwrightGarner Investment Company, LP, was restruct ured into defendant JCP, and plaintiff acknowledges in his complaint that these partne rships are family limited partnerships. Alan Cartwright apparently does not dispute that the trust documents specifically permit investment of the trust assets in family limited partnerships, as does Tennessee law. See Cartwright v. Jackson Capital , 2012 WL 1997803, at *2 n.3 (Tenn. Ct. App. June 5, 2012).
As a consequence of defendants’ alleged tor tious conduct, plaintiff claims that both the value of the trust assets, and his beneficial interest therein, have been diminished. Investment, management, and distribution of tr ust assets are matters of trus t administration, not partnership administration. In addition to an accounting, plai ntiff described in his complaint part of the remedy he seeks as follows: “Pla intiff Alan C. Cartwright indi vidually and the trust funds of which he is a primary beneficiar y are each entitled to recover an amount to be determined by a jury.” 9
Further, if plaintiff were successful in recovering trust assets that he claims were diminished as a consequence of defendants’ co nduct, the court would be required to exercise some control over the defendant partnerships and th e trusts in order to effectuate that remedy. Accordingly, we hold that the district court corr ectly concluded that Alan Cartwright’s federal action is quasi in rem.

9 Plaintiff’s complaint, par. 68.No. 12-6314 Cartwright v. Garner, et al. Page 15

B. Tennessee Chancery Court first exercised juri sdiction over the propert y at issue pursuant to state law

At the time the district cour t issued its opinion, the allega tion of undue influence by Alice Cartwright Garner with respect to two amendm ents to the ACC Grantor Trust signed by Alan Cartwright was pending before the Shelby County Chancery Cour t on remand. Plaintiff claims that these amendments affect the distributions from the ACC Grantor Trust and other trusts to which Alan Cartwright is also a beneficiary.
The Chancery Court first acquired jurisdicti on over Alan Cartwright’s cross-claims of both undue influence and mismanagement, both of which concern trust administration, pursuant to Tennessee law. Under Tennessee law: Chancery courts and other cour ts of record having probate jurisdiction: (1)To the exclusion of all other cour ts, have concurre nt jurisdiction over proceedings in this state br ought by a trustee or beneficiary concerning the administration of a trust. Tenn. Code Ann. § 35-15-203(1).

In his Tennessee state court action before the Chancery Court, plaintiff claimed that he was deprived of trust assets due to misman agement and manipulation, and that he was unduly influenced to sign certain amendments to the A CC Grantor Trust, all of which plaintiff alleged reduced the assets of and distributions from the trusts. Alan Cartwright subsequently voluntarily dismissed his tort claims before the Chancery Court, but Alan Cartwr ight’s claim of undue influence was pending before the Chancery C ourt on remand from the Tennessee Court of Appeals when the district court ruled on defendants’ motion to dismiss.

The ACC Grantor Trust and other trusts now under the jurisdiction of the Chancery Court are limited partners of defendant JCP in the instan t case, and are the same trusts that plaintiffappellant alleged before the Chancery Court, a nd now alleges in this federal action, were mismanaged, manipulated, and wron gfully diverted by the defendant s. Both the district court action and the Chancery Court action involve issues of trust administration, and control over the trust assets would be required by the Chancery Cour t in order to provide relief. Jurisdiction overNo. 12-6314 Cartwright v. Garner, et al. Page 16

those assets was first exercised by the Shelby Co unty Chancery Court in Tennessee. Because the Tennessee Chancery Court first exercised jurisdicti on over the trusts and their administration in these quasi in rem actions, the district court lacks subject ma tter jurisdiction over plaintiff’s claims.
For these reasons, the judgment of the distri ct court dismissing plai ntiff-appellant’s case for lack of subject matter jurisdiction is AFFIRMED . Because we affirm the district court, it is not necessary to consider defendants’ alternative arguments in support of their motion to dismiss.