Court Opinion

ID: 43994
Source: CourtListenerOpinion
Date Created: 2010-04-25 22:03:22+00
Date Added: 2024-06-11T17:17:07.286955
License: Public Domain

[DO NOT PUBLISH]

             IN THE UNITED STATES COURT OF APPEALS

                     FOR THE ELEVENTH CIRCUIT         FILED
                      ________________________ U.S. COURT OF APPEALS
                                                         ELEVENTH CIRCUIT
                                                             May 19, 2005
                             No. 04-14651
                                                          THOMAS K. KAHN
                         Non-Argument Calendar                CLERK
                       ________________________

                D.C. Docket No. 04-00054-CV-ORL-31DAB

CAROL ABRAMSON,
IRA ABRAMSON,

                                                      Plaintiffs-Appellants,

                                   versus

THE WALT DISNEY COMPANY,
WALT DISNEY WORLD COMPANY,
WALT DISNEY WORLD HOSPITALITY AND RECREATION
CORPORATION,

                                                      Defendants-Appellees.

                      __________________________

             Appeal from the United States District Court for the
                         Middle District of Florida
                       _________________________

                               (May 19, 2005)

Before TJOFLAT, BIRCH and PRYOR, Circuit Judges.

PER CURIAM:
      Carol Abramson and her husband, Ira Abramson, appeal the district court’s

order granting defendant-appellee Walt Disney Company’s (“WDC”) motion to

dismiss for lack of personal jurisdiction. We AFFIRM.

                                I. BACKGROUND

      In November 2001, Carol Abramson tripped over a railing while walking

through a darkened corridor at Disney’s Animal Kingdom in Florida. R3-1 at 1.

She fell and broke her hip. Id. In May 2002, the Abramsons filed a personal

injury action against WDC, Walt Disney World (“WDW”), and Walt Disney

World Hospitality and Recreation Corporation (“HRC”) in the Eastern District of

New York. Id. WDC moved to dismiss for failure to state a cause of action

pursuant to Federal Rule of Civil Procedure 12(b)(6) and WDW and HRC moved

to dismiss for lack of personal jurisdiction pursuant to Fed. R. Civ. P. 12(b)(2).

R1-10, 11. Following the Abramsons’ response and a hearing, the district court

denied WDW and HRC’s motion to dismiss for lack of personal jurisdiction, and

transferred the case to the Middle District of Florida; it declined to address WDC’s

motion to dismiss for failure to state a claim noting that it would be more

appropriately handled by the transferee court. R2-12, R3-25 at 1, 8, 9.

      Following the transfer, the Abramsons were granted leave to file an

amended complaint. R4 at 52. In the amended complaint, the Abramsons

                                          2
identified WDC as “a Delaware corporation with its principal place of business in

California[,]” WDW as a subsidiary of WDC, and “a Delaware corporation with its

principal place of business in Florida[,]” and HRC as a subsidiary of WDC and

WDW and a “Delaware corporation with its principal place of business in

Florida.” R4-53 at 2. The Abramsons alleged that the principal business of both

WDW and HRC was the ownership, management, and operation of various

integrated WDC facilities in Florida, including Animal Kingdom. Id. They

described WDW and HRC as “‘sister’ subsidiaries” which were both owned,

operated, and served as agents for WDC. Id. at 2-3. They also claimed that

WDC’s Chairman/Chief Executive Officer (“CEO”) and WDC controlled the day-

to-day operations of WDW and HRC. Id. at 3-4.

      In response to the amended complaint, WDC moved to dismiss for lack of

personal jurisdiction and WDW and HRC filed an answer. R4-54, 55. In support

of the motion to dismiss, WDC attached the affidavit of WDC Senior Vice

President – Eastern Regional Counsel and Assistant Secretary Kenneth E.

Newman. R4-54, Ex. 2. Newman explained that WDC’s “business activities . . .

consist of ownership of stock” of various entertainment enterprises and that it did

not “conduct business in the State of Florida[,]” and that WDC did not “control the

business activities” of either WDW or HRC. Id. at 2, 3. The Abramsons replied

                                         3
with the affidavit of their attorney, Eric Turkewitz, in which he commented that

based on his “personal knowledge” as a result of various materials which he had

read, WDC conducted business directly in Florida. R5-60 at 1, 2. Turkewitz’s

affidavit was supported by copies of internet articles, letters to WDC stockholders

from WDC’s Chairman/CEO, and excerpts from WDC’s CEO’s autobiography.

Id., Exs. A-H. In the articles, the WDC CEO was quoted as claiming that he was

directly and personally involved in operations in Florida, including at Animal

Kingdom, and that all of the Disney-related enterprises were in the business of

“maximiz[ing the profits]” for WDC through their “interdependence.” R5-60 at 2,

3, 4, Ex. C. The “interdependence” at Animal Kingdom involved using WDC’s

successful past films involving animals as a basis for shows and WDC’s planned

films involving animals as a basis for rides. Id. at 4. The district court granted

WDC’s motion to dismiss for want of personal jurisdiction. R5-68. Following the

district court’s Federal Rule of Civil Procedure 54(b) certification, the Abramsons

appealed.1

       1
         The Abramsons timely appealed and moved for certification under Rule 54(b). The
appeal was filed with this court, but was dismissed for lack of jurisdiction because the district
court had not yet certified the case. Abramson v. Walt Disney Company, No. 04-12590 (11th
Cir. Aug. 10, 2004).

                                                 4
      On appeal, the Abramsons argue that the district court erred by failing to

allow them discovery regarding the jurisdictional issue, by failing to hold an

evidentiary hearing, and by granting WDC’s motion to dismiss.

                                  II. DISCUSSION

      “We review a district court’s dismissal for lack of personal jurisdiction de

novo.” United States SEC v. Carrillo, 115 F.3d 1540, 1542 (11th Cir. 1997). We

review a district court’s decision as to whether to hold an evidentiary hearing on

the jurisdictional issue for abuse of discretion. Cliff v. Payco Gen. Am. Credits,

Inc., 363 F.3d 1113, 1121 (11th Cir. 2004); see also Walt Disney Co. v. Nelson,

677 So. 2d 400, 403 (Fla. Dist. Ct. App. 1996) (observing that the trial court need

not hold an evidentiary hearing unless the affidavits are not “factually

reconcilable”). We also review the district court’s failure to order discovery on

the jurisdictional issue for abuse of discretion. Leigh v. Warner Bros., Inc., 212

F.3d 1210, 1214 (11th Cir. 2000).

       Absent an evidentiary hearing on a motion to dismiss for want of personal

jurisdiction, the district court must first determine that the plaintiff has established

a prima facie case of personal jurisdictional over the nonresident defendant which

is capable of withstanding a directed verdict motion. Madara v. Hall, 916 F.2d

1510, 1514 (11th Cir. 1990). In making this determination, the district court must

                                           5
accept the plaintiff’s factual allegations, unless those allegations are contested by

the defendant’s affidavits. Id. If the allegations are contested, the district court

should construe all reasonable inferences in favor of the plaintiff. Id. Where the

parties’ affidavits cannot be reconciled, the trial court should hold an evidentiary

hearing to resolve the jurisdictional issue. Venetian Salami Co. v. Parthenais, 554

So.2d 499, 503 (Fla. 1989).

      The court must then engage in a two-part analysis to determine whether it

has jurisdiction over the nonresident defendant, and can exercise that jurisdiction

only if both prongs are satisfied. Madara, 916 F.2d at 1514. The first prong of

that analysis requires examination of whether a basis of jurisdiction is provided

under the forum state’s long arm statute. Id. If that prong is met, the second

prong requires consideration of whether there are sufficient minimum contacts to

satisfy due process concerns. Id.

      Because the reach of a forum state’s long arm statute is a question of state

law, we construe it as would the state’s highest court. Id. In Florida, a

nonresident is subjected to jurisdiction for “[o]perating, conducting, engaging in,

or carrying on a business or business venture . . . in this state,” “committing a

tortious act within this state,” or engaging “in substantial and not isolated activity

within this state.” FLA. STAT. § 48.193(1)(a) and (b), and (2). The necessary

                                           6
minimum contacts between the foreign corporation and the state, for the assertion

of general jurisdiction, must be “continuous and systematic.” Consolidated Dev.

Corp. v. Sherritt, Inc., 216 F.3d 1286, 1292 (11th Cir. 2000). A corporation which

engages in substantial activity in a state through a subsidiary is subject to personal

jurisdiction in Florida. Universal Caribbean Establishment v. Bard, 543 So.2d

447, 448 (Fla. Dist. Ct. App. 1989). To determine whether a foreign corporation is

liable based on a subsidiary’s substantial activity, we consider the ownership of

the subsidiary, the business activities of the subsidiary, and the financial

relationship between the corporation and the subsidiary . Meier v. Sun Int’l

Hotels, Ltd., 188 F.3d 1264, 1272-73 (11th Cir. 2002). Because “the mere

presence of a wholly owned subsidiary is insufficient to form a basis for the

assertion of personal jurisdiction,” one of the factors to be considered is the

amount of control exercised by the foreign corporation. State of Florida v.

American Tobacco Co., 707 So. 2d 851, 854-55 (Fla. Dist. Ct. App. 1998). To

establish an agency relationship, the foreign corporation must exercise such

control that the subsidiary’s sole purpose for existence is to accomplish the aims

of the foreign corporation and there is no evidence of separate interests. Id. at

855. Evidence of operational control is not satisfied where the foreign

corporation’s policy statements merely establish goals for its subsidiaries and

                                           7
where the subsidiaries operate with a “high degree of autonomy.” Id. at 856.

Jurisdiction over the foreign corporation will not be exercised based on the

subsidiary’s local activities where the subsidiary carries on its own business and

preserves some independence from the foreign corporation. Consolidated Dev.

Corp., 216 F.3d at 1293. A foreign corporation will be held subject to personal

jurisdiction, however, if the subsidiary is a “mere instrumentality.” Meier, 188

F.3d at 1273.

      Once the plaintiff has demonstrated that the defendant has met at least one

of the jurisdictional criteria of the Florida long-arm statute, a court must determine

whether the defendant possesses sufficient minimum contacts with the state and

whether maintenance of the suit will “offend ‘traditional notions of fair play and

substantial justice.’” Walt Disney Co., 677 So. 2d at 402 (quoting International

Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158 (1945) (internal

citation omitted)). After a plaintiff has established a prima facie case for

jurisdiction and the defendant has filed affidavits contesting jurisdiction, the

plaintiff bears the burden of proving sufficient jurisdiction by affidavits or other

sworn statements. Id. at 402-03.

      Accepting Abramson’s factual allegations as true, Abramson claimed that

WDC, a foreign corporation, was conducting business in Florida through the

                                          8
operations of its subsidiaries, WDW and HRC. This allegation was sufficient to

state a prima facie case of jurisdiction under Florida’s long-arm statute. This

allegation was, however, directly and completely contradicted by the affidavit of

WDC’s Senior Vice President – Eastern Regional Counsel and Assistant Secretary

Kenneth E. Newman. In his affidavit, Newman explained that WDC neither did

business in Florida nor had an agent in Florida. He stated that WDC neither owns

or operates WDW and HRC, which are both wholly owned subsidiaries of WDC

subsidiary Disney Enterprises, Inc. (“DEI”). He established that WDW and HRC

were each responsible for their own day-to-day activities and finances, maintained

separate books, records, and accounts from WDC, and were not authorized to act

as an agent for WDC. Newman’s allegation was sufficient to shift the burden back

to Abramson to produce sworn testimony in support of jurisdiction. Abramson’s

attorney’s sworn affidavit presented quotations from WDC’s CEO in support of

jurisdiction. The affidavit, however, did not counter Newman’s explanation of the

business practices of WDC, WDW, or HRC, and does not contradict the absence

of contact or separate business entities between WDC, WDW, and HRC.2 Absent

competent evidence to contradict Newman’s affidavit, the district court did not

       2
          Despite WDC Chairman’s claim of “interdependence,” Newman’s affidavit makes clear
that WDW and HRC operate autonomously, even if those autonomous operations are based on
film ideas produced and owned by WDC.

                                            9
abuse its discretion by not holding an evidentiary hearing. Based on the

uncontested facts contained in Newman’s affidavit, there is no indication that

WDC does business in Florida or has an agency relationship with WDW or HRC.

Further, the minimum contacts requirement is not satisfied directly by WDC or

indirectly through WDW or HRC. The district court did not abuse its discretion in

not permitting discovery or holding an evidentiary hearing, and did not err in

declining to exercise jurisdiction over WDC.3

                                    III. CONCLUSION

       For the reasons stated above, the district court’s order granting WDC’s

motion to dismiss for lack of personal jurisdiction is

       AFFIRMED.

       3
          The Abramsons requested discovery while the case was pending in the Eastern District
of New York. R2-12 at 15-16. In the memorandum opinion transferring the case to the Middle
District of Florida, the district judge held that they had “failed to persuade” the court that they
were entitled to jurisdictional discovery, relying on “wide-ranging requests for material of
dubious relevance” instead of “specific, relevant demands.” R3-25 at 8. The Abramsons did not
renew this request in the Middle District of Florida.

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