Court Opinion

ID: 9353393
Source: CourtListenerOpinion
Date Created: 2023-01-11 20:00:42.060868+00
Date Added: 2024-06-11T17:07:54.707176
License: Public Domain

USCA11 Case: 20-14440     Document: 44-1     Date Filed: 01/11/2023    Page: 1 of 16

                                                    [DO NOT PUBLISH]
                                    In the
                 United States Court of Appeals
                          For the Eleventh Circuit

                           ____________________

                                  No. 20-14440
                            Non-Argument Calendar
                           ____________________

        HART AGRICULTURE CORPORATION,
        RICHARD WATSON,
                                                     Plaintiffs-Appellants,
        versus
        KEA INVESTMENTS LIMITED,

                                                     Defendant-Appellee.

                           ____________________

                  Appeals from the United States District Court
                      for the Southern District of Georgia
                    D.C. Docket No. 1:20-cv-00018-JRH-BKE
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        2                    Opinion of the Court                20-14440

                          ____________________

                          ____________________

                                 No. 20-14451
                           Non-Argument Calendar
                          ____________________

        HART DAIRY CREAMERY CORPORATION,
        TIMOTHY CONNELL,
                                                    Plaintiffs-Appellants,
        versus
        KEA INVESTMENTS LIMITED,

                                                    Defendant-Appellee.

                          ____________________

                 Appeals from the United States District Court
                     for the Southern District of Florida
                     D.C. Docket No. 1:20-cv-20452-BB
                           ____________________

        Before JORDAN, NEWSOM, and LUCK, Circuit Judges.
        PER CURIAM:
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        20-14440                    Opinion of the Court                              3

               Timothy Connell, Richard Watson, and their companies
        sued Kea Investments—in two separate proceedings—for declara-
        tory judgments that they weren’t liable for a judgment Kea won
        against Richard Watson’s brother Eric1 in the United Kingdom and
        for permanent injunctions to prevent Kea from joining them to lit-
        igation in the United Kingdom.
              District courts in the Southern District of Florida and the
        Southern District of Georgia dismissed both cases because they
        concluded that they lacked personal jurisdiction over Kea and
        in rem jurisdiction over Connell’s and Richard’s assets. We affirm.
                           FACTUAL BACKGROUND
               Richard owned a 4,000 acre dairy farm in southern Georgia
        called Hart Agriculture Corporation. Eric was a New Zealand busi-
        nessperson who didn’t own any of Hart Agriculture. Connell was
        the chief executive officer and owner of Hart Dairy Creamery Cor-
        poration. Hart Dairy was Hart Agriculture’s exclusive buyer of
        raw milk. Eric wasn’t an owner or investor in Hart Dairy.
              Eric entered into a joint venture with a Monaco business-
        man named Glenn Owen. The joint venture dissolved into a “long
        and drawn out legal battle” in the United Kingdom. Glenn’s com-
        pany, Kea Investments, won an $87 million judgment against Eric
        and other defendants in the “High Court of Justice, Business and
        Property Courts of England and Wales.” Richard, Connell, Hart

        1
            Because they share a last name, we refer to them as Richard and Eric.
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        4                      Opinion of the Court                 20-14440

        Agriculture, and Hart Dairy weren’t parties to the litigation in the
        United Kingdom or to the judgment.
               After obtaining the judgment, Kea tried to identify and ob-
        tain Eric’s assets to satisfy the judgment. Beginning in October
        2018 and continuing through January 2020, Kea sent letters to Con-
        nell—through Connell’s lawyer in New Zealand—because Connell
        had received money from a Panamanian company connected with
        Eric. Kea said that, based on Eric’s prior actions, it thought that he
        was trying to avoid satisfying the judgment by squirreling away his
        money with his friends and family. Kea contacted Connell—Eric’s
        friend—because there was “no explanation of how or on what
        terms” Connell had become the beneficial owner of “a very sub-
        stantial quantity” of Eric’s shell company.
              In one letter, Kea said:
              Mr Connell and Mr Watson’s brother, Mr Richard
              Watson, had set up together an entity called Hart
              Dairy which was to market . . . the milk produced by
              a company called Hart Acquisitions, which owns
              dairy farms in Georgia. When asked further ques-
              tions, [Eric] said that Hart Dairy was owned by Mr
              Connell and ‘a bunch of investors’, with Richard Wat-
              son holding only a small shareholding in it. Later,
              having said that Hart Dairy might in fact be called
              Hart Holdings USA LLC, or that it might be a subsid-
              iary of that company, [Eric] described Hart Holdings
              USA LCC [sic] as ‘Tim Connell’s company and my
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        20-14440               Opinion of the Court                         5

              brother may have a minority shareholding in it.’
              However, in [Eric’s] 6th affidavit he resiled from this
              story and said that Hart Holdings was wholly owned
              by Richard Watson.
        Based on this testimony and Connell’s stock trading history, Kea
        asked Connell to explain his prior corporate dealings with Eric and
        his shell companies in relation to Connell’s business activities with
        “Hart Holdings/Hart Dairy/International Dairy and any related
        entities.” Kea also said that it was considering joining Connell and
        his company to the proceeding in the United Kingdom to help sat-
        isfy its judgment against Eric. In total, Kea sent three letters to
        Connell about six months apart, the last in January 2020.

                            PROCEDURAL HISTORY
                      Southern District of Florida Litigation
               Connell and Hart Dairy sued Kea in the Southern District of
        Florida seeking a declaration that: (1) they were subject to personal
        jurisdiction in the Southern District of Florida and not in the United
        Kingdom; (2) their assets were subject to jurisdiction in rem in the
        Southern District of Florida and not in the United Kingdom; and
        (3) they were not liable to Kea for its judgment against Eric. They
        also sought an anti-suit injunction to prevent Kea from joining
        them to the proceeding in the United Kingdom. As to jurisdiction
        in the United Kingdom, Connell admitted that he took out a two
        million dollar loan in funds that “appear[ed] potentially to have
        been traceable to transactions addressed” in the United Kingdom
        action and therefore conceded that the United Kingdom court had
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        6                      Opinion of the Court                 20-14440

        in rem jurisdiction over those funds—but not over Hart Dairy or
        Connell’s other assets, or personal jurisdiction over Connell him-
        self.
               After Kea defaulted, Connell and Hart Dairy moved for a fi-
        nal default judgment as to both the declaration and the injunction.
        They argued that their lawsuit and the lawsuit in the United King-
        dom both concerned the same assets—Connell’s and Hart Dairy’s
        property—and the lawsuit in the United Kingdom was a threat be-
        cause the foreign court would order the assets to be removed from
        the district.
               The district court denied the motion for a final default judg-
        ment for lack of personal jurisdiction. It directed Connell and Hart
        Dairy to file a renewed motion explaining why Kea was subject to
        personal jurisdiction in the Southern District of Florida and why
        the district court should exercise its discretionary power to issue an
        anti-suit injunction which would interfere with the ongoing litiga-
        tion in the United Kingdom.
               In their renewed motion, Connell and Hart Dairy argued
        that Kea’s enforcement actions directed at them created minimum
        contacts in Florida. And they argued that their property’s presence
        in the Southern District of Florida supported in rem jurisdiction.
        Finally, they argued that the anti-suit injunction would “merely
        prevent Kea from improperly instigating foreign litigation prem-
        ised upon an improper invocation of such jurisdiction.”
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        20-14440                Opinion of the Court                         7

                The district court denied the renewed motion for jurisdic-
        tional and prudential reasons. First, it concluded that it didn’t have
        personal jurisdiction over Kea because Connell and Hart Dairy
        hadn’t alleged that Kea conducted business in Florida. Second, the
        district court explained that in rem jurisdiction considered where
        the defendant’s, not the plaintiff’s, property was located. It con-
        cluded that Connell’s and Hart Dairy’s property in southern Flor-
        ida didn’t mean that the district court had jurisdiction over Kea.
        The district court continued that, even if it had personal jurisdic-
        tion, it wouldn’t exercise its discretion to issue an anti-suit injunc-
        tion because doing so would deprive the court in the United King-
        dom of the ability to enforce its valid judgment and the district
        court presumed that, if Connell and Hart Dairy were right that they
        weren’t subject to jurisdiction there, the court in the United King-
        dom wouldn’t proceed against them. The district court then dis-
        missed the case and Connell and Hart Dairy appealed.
                      Southern District of Georgia Litigation
               Richard and Hart Agriculture also sued Kea but in the South-
        ern District of Georgia. Their complaint was almost identical to
        Connell’s and Hart Dairy’s and sought similar relief: a declaration
        that they were subject to personal and in rem jurisdiction in the
        Southern District of Georgia and not in the United Kingdom and
        that they were not liable for the United Kingdom judgment, and an
        anti-suit injunction to prevent Kea from joining them to United
        Kingdom litigation. The only major difference was that Richard
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        8                       Opinion of the Court                  20-14440

        and Hart Agriculture didn’t allege that they owned any stock sub-
        ject to in rem jurisdiction in the United Kingdom.
                After Kea defaulted, Richard and Hart Agriculture moved
        for a final default judgment as to both the declaration and the per-
        manent injunction. They made the same arguments that Connell
        and Hart Dairy did.
                The district court denied the motion because it lacked per-
        sonal jurisdiction over Kea as to both the Georgia long-arm statute
        and due process. As to the Georgia long-arm statute, the district
        court held that the complaint did not allege facts sufficient to satisfy
        any of the bases for personal jurisdiction over a nonresident defend-
        ant listed in the statute. The district court explained that the com-
        plaint didn’t allege that Kea had conducted any business in Georgia,
        committed a tortious injury in Georgia, or own, use, or possess any
        real property in Georgia. Without these crucial allegations, the dis-
        trict court held, it didn’t have personal jurisdiction over Kea. And
        as to due process, the district court held that Kea lacked any con-
        tacts in the Southern District of Georgia and the mere presence of
        Richard’s and Hart Agriculture’s assets—not Kea’s—did not pro-
        vide in rem jurisdiction.
                Richard and Hart Agriculture renewed their motion for a fi-
        nal default judgment. As to personal jurisdiction, they alleged that
        Kea had (1) engaged in “very substantial litigation in the United
        States”; (2) “engaged in a broader global series of litigations in at
        least six jurisdictions”; (3) “written to counsel for [Richard and Hart
        Agriculture] and to [their] exclusive buyer of raw milk [Connell]
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        20-14440                Opinion of the Court                         9

        asserting that [Richard and Hart Agriculture] are already subject to
        strictures ostensibly imposed upon them by the U.K. Judgment”;
        (4) claimed that Richard’s and Hart Agriculture’s assets were “sub-
        ject specifically to enforcement in rem as putative assets of [Eric]”;
        (5) demanded that Richard and Hart Agriculture provide discovery
        of their assets and records; (6) explicitly stated that Kea intended to
        haul Richard and Hart Agriculture into court in the United King-
        dom; and (7) admitted to intentionally defaulting in the lawsuit in
        the Southern District of Georgia. Based on these acts, they con-
        tended, Kea should anticipate being brought into the court where
        the targets of its enforcement actions resided. As to in rem juris-
        diction, Richard and Hart Agriculture argued that jurisdiction was
        proper because the disputed property was in the district.
                The district court denied the renewed motion because the
        letters from Kea to Connell didn’t constitute a business transaction
        under Georgia law. And, as to in rem jurisdiction, the district court
        concluded the suit sought to prevent Kea from pursuing litigation
        and so “[w]hether the anti-suit injunction [was] granted or not
        [had] no bearing on the interest of the Plaintiffs and Defendant in
        the res.” Richard and Hart Agriculture appealed.

                            STANDARD OF REVIEW
               “We review de novo whether the district court had personal
        jurisdiction over a nonresident defendant.” Louis Vuitton
        Malletier, S.A. v. Mosseri, 736 F.3d 1339, 1350 (11th Cir. 2013).
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        10                         Opinion of the Court                       20-14440

                                       DISCUSSION
              The Appellants 2 argue that the district courts could exercise
        personal jurisdiction over Kea because of the letters Kea sent to
        Connell’s counsel in New Zealand and the “contemplated future
        consequences” of those letters. We disagree.
               “A federal district court sitting in diversity may exercise per-
        sonal jurisdiction to the extent authorized by the law of the state in
        which it sits and to the extent allowed under the Constitution.”
        Stubbs v. Wyndham Nassau Resort & Crystal Palace Casino, 447
        F.3d 1357, 1360 (11th Cir. 2005). Because whether a defendant is
        subject to personal jurisdiction depends on state law, we divide our
        discussion of personal jurisdiction into two parts—one for Florida
        and one for Georgia.
                                            Florida
               The Appellants argue that Kea “is a passive investment ve-
        hicle” and therefore “conducts no operations other than holding its
        assets and enforcing upon its claims.” Specifically, they claim that,
        even though Kea addressed its letters to Connell’s counsel in New
        Zealand, the letters were “meant to effect and be received by Ap-
        pellants in their home fora.”

        2
         We combined the two cases on appeal. For ease of reference, we refer to the
        four plaintiffs as “Appellants.” We also issued two jurisdictional questions to
        ensure that the parties were fully diverse. We are satisfied that the parties are
        diverse and so DENY all pending motions to supplement the record and to
        amend the complaints.
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        20-14440                Opinion of the Court                        11

                The Florida long-arm statute provides specific personal ju-
        risdiction over anyone who is “[o]perating, conducting, engaging
        in, or carrying on a business or business venture in this state or hav-
        ing an office or agency.” Fla. Stat. § 48.193(1)(a)(1). Under this sec-
        tion, “the defendant’s activities must be considered collectively and
        show a general course of business activity in the state for pecuniary
        benefit.” Stonepeak Partners, LP v. Tall Tower Cap., LLC, 231
        So. 3d 548, 556 (Fla. Dist. Ct. App. 2017) (quotation marks omit-
        ted).
               Here, Kea was not engaged in business in Florida. Kea sent
        three letters to a lawyer in New Zealand asking for information
        about Connell’s and Hart Dairy’s assets and if they were traceable
        to Eric. But Connell’s complaint is silent as to whether Kea has any
        agents or offices in Florida, has any revenue from Florida, or even
        has a license to do business in Florida. Florida state courts have
        consistently required more than merely sending three information-
        gathering letters to be subject to personal jurisdiction in Florida un-
        der the “carrying on business” prong of the Florida long-arm stat-
        ute. See, e.g., Travel Opportunities of Fort Lauderdale, Inc. v. Wal-
        ter Karl List Mgmt., Inc., 726 So. 2d 313, 314 (Fla. Dist. Ct. App.
        1998) (holding that selling nineteen lists of customers over a two-
        year period did not constitute general course of business activity in
        the state for pecuniary benefit); Sebra v. Int’l Spec. Imports, Inc.,
        869 So. 2d 732, 734 (Fla. Dist. Ct. App. 2004) (holding that the de-
        fendant’s one-time business trip to locate a site for a supermarket
        did not constitute operating a business); Joseph v. Chanin, 869
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        12                      Opinion of the Court                 20-14440

        So. 2d 738, 740 (Fla. Dist. Ct. App. 2004) (holding that four transac-
        tions—closing savings accounts and safe deposit boxes—were not
        carrying on a business because “they were not of a nature or exten-
        sive enough to constitute the ‘carrying on a business or business
        venture’”). With no office, agent, or sales in Florida, sending a few
        exploratory letters isn’t enough to constitute “carrying on a busi-
        ness” to subject Kea to specific personal jurisdiction in Florida.
                                       Georgia
                The Georgia long-arm statute provides specific personal ju-
        risdiction over an out-of-state defendant if it “transacts any business
        within” Georgia. O.C.G.A. § 9-10-81(1). Transacting business re-
        quires that the “nonresident defendant has purposefully done some
        act or consummated some transaction in [Georgia].” Diamond
        Crystal Brands, Inc. v. Food Movers Int’l, Inc., 594 F.3d 1249, 1264
        (11th Cir. 2010) (quoting Aero Toy Store, LLC v. Grieves, 631 S.E.
        2d 734, 737 (Ga. App. Ct. 2006)). Intangible acts also may be con-
        sidered, including mail and telephone calls. Id.
               Kea’s connection to Georgia is even more attenuated than
        its connection to Florida. Kea owns no property in Georgia, has no
        agents or offices in Georgia, and solicits no business from Geor-
        gians. Unlike Florida, Kea did not even mail a letter to Richard’s
        lawyer—the only connection to Georgia is that Kea mentioned a
        dairy farm in Georgia in a letter to Connell. Unlike the cases Rich-
        ard cites, Kea never contacted him at all. Kea is not subject to per-
        sonal jurisdiction in Georgia because it never contacted or solicited
        business from anyone in Georgia. In the light most favorable to
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        20-14440                   Opinion of the Court                               13

        Richard and Hart Dairy, Kea asked a New Zealand lawyer about
        his Florida client’s connections to a United Kingdom judgment
        debtor and mentioned the business of a Georgia citizen. That is
        not enough to constitute operating a business in Georgia. See In-
        tercontinental Servs. of Del, LLC v. Kent, 807 S.E. 2d 485, 490 (Ga.
        App. Ct. 2017) (finding no personal jurisdiction where the defend-
        ant had no offices, agents, and merely did loading and unloading at
        a port in Delaware). 3
                                    In Rem Jurisdiction
                Appellants fall back to the position that—even if the district
        courts didn’t have personal jurisdiction and couldn’t issue injunc-
        tive relief—the district courts still had in rem jurisdiction over their
        assets and so could issue declaratory relief. But this argument
        doesn’t save their cases because: (1) they didn’t proceed in rem and
        (2) if we construe their complaints that way, then they didn’t
        properly allege subject matter jurisdiction.
                In rem proceedings are actions “directed against the res as a
        fictious person.” 4 World Wide Supply OU v. Quail Cruises Ship

        3
         Because the Appellants’ complaints do not satisfy the state long-arm statutes,
        we don’t address whether they would satisfy the “minimum contacts” stand-
        ard required by due process. Stubbs, 447 F.3d at 1360.
        4
         There are two kinds of “in rem” proceedings, though courts often conflate
        them. Quasi-in-rem proceedings are actions “against a party who is not per-
        sonally present in the district but whose property is present.” World Wide
        Supply OU, 802 F.3d at 1260. See also Freeman v. Alderson, 119 U.S. 185, 187
        (1886) (“There is, however, a large class of cases which are not strictly actions
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        14                        Opinion of the Court                     20-14440

        Mgmt., 802 F.3d 1255, 1259 (11th Cir. 2015). There are (generally)
        four kinds of in rem proceedings: admiralty, forfeiture to the gov-
        ernment, a proceeding to settle an estate (like a bankruptcy estate
        or a probate estate), and title clearance. Restatement (Second) of
        Judgments § 6 cmt. b. (Am. L. Inst. 2021). In each kind of proceed-
        ing, the property is named as the defendant. See, e.g., Odyssey Ma-
        rine Exploration, Inc. v. Unidentified Shipwrecked Vessel, 657 F.3d
        1159 (11th Cir. 2011) (admiralty); United States v. $291,828.00 In
        U.S. Currency, 536 F.3d 1234 (11th Cir. 2008) (forfeiture); In re
        Burke, 146 F.3d 1313 (11th Cir. 1998) (bankruptcy).
               But the Appellants didn’t sue their property—they sued Kea.
        Both complaints name Kea and describe the defendant as Kea. And
        they didn’t (as is required in admiralty in rem actions) “describe
        with reasonable particularity the property that is the subject of the
        action.” Fed. R. Civ. P. C(2)(b). The only mention of in rem juris-
        diction in the complaints is where they assert that “this Court holds
        jurisdiction in rem over the assets which Kea has stated its intent
        to enforce its putative rights.” Even though the Appellants contend
        in their briefs that they proceeded in rem, the faces of the com-
        plaints reveal that the Appellants sued Kea, not their own property
        in rem.

        in rem, but are frequently spoken of as actions quasi in rem, because, though
        brought against persons, they only seek to subject certain property of those
        persons to the discharge of the claims asserted.”). In rem proceedings are di-
        rected at the res itself. World Wide Supply OU, 802 F.3d at 1259.
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        20-14440                Opinion of the Court                        15

                Even assuming they had proceeded in rem, we’d still affirm
        both dismissals because the Appellants haven’t asserted a form of
        subject matter jurisdiction. Both complaints invoke only the fed-
        eral courts’ diversity jurisdiction, 28 U.S.C. section 1332(a). But
        that section grants district courts jurisdiction over actions between
        “citizens of different States” or “citizens of a State and citizens or
        subjects of a foreign state[.]” Id. § 1332(a)(1)–(2). If we construe
        the Appellants’ complaints as being in rem, then there is only prop-
        erty on the other side of the “v.” This isn’t enough to satisfy diver-
        sity jurisdiction. See Powell v. Offshore Nav., Inc., 644 F.2d 1063,
        1065 n.3 (5th Cir. May 1981) (“For purposes of the complete diver-
        sity requirement, discussed in greater detail below, we treat the
        vessel as neither diverse nor non-diverse, for its presence in the suit
        in no way implicates the rationale behind diversity jurisdiction,
        that is, the protection of out-of-state litigants against bias in state
        courts.”).
                 Indeed, for in rem actions, Congress has specifically pro-
        vided for in rem jurisdiction. See, e.g., id. §§ 1333 (admiralty); 1334
        (bankruptcy); 1345 (all civil actions with United States as the plain-
        tiff, including forfeiture). The Appellants have the duty to invoke
        our jurisdiction and—if we construe their complaints as being
        in rem—the Appellants have failed to do so. See Fed. Mut. Ins. Co.
        v. McKinnon Motors, LLC, 329 F.3d 805, 807 (11th Cir. 2003) (hold-
        ing that the party invoking federal jurisdiction has the burden of
        pleading and proving it).
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        16                     Opinion of the Court                 20-14440

                                  CONCLUSION
                The Appellants have failed to sufficiently allege personal ju-
        risdiction over Kea or invoke the district courts’ in rem jurisdiction
        over the Appellants’ assets. Thus, we affirm.
              AFFIRMED.