Douglas Nelson v. The Crew Network Inc, et. al. – Continued

Lipcon, Margulies, Alsina & Winkleman, P.A

August 11, 2011

Douglas Nelson v. The Crew Network Inc, et. al. – Continued

Reply in Support of Motion to Stay Pending Jurisdictional Discovery

In this Reply Plaintiff is responding to the arguments raised by the Defendants in their response to Plaintiff’s original motion. Plaintiff reasserts his contention that the relief he has sought is the standard procedure in this Circuit and that binding precedent shows that he is entitled to jurisdictional discovery. Further Plaintiff demonstrates that his initial pleadings were sufficient to support personal jurisdiction, and that without the benefit of jurisdictional discovery it would be impossible to meaningfully respond to the Defendant’s assertions.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO: 11-21282-CV-MARTINEZ/MCALILEY
DOUGLAS NELSON,
Plaintiff,

v.

THE CREW NETWORK, INC.,
FRASER YACHTS FLORIDA, INC.,
FRASER YACHTS WORLDWIDE,
TRINITY OVERSEAS SERVICES LIMITED,
and XYZ CORPORATION,

Defendants.
__________________________________________/

PLAINTIFF’S REPLY IN SUPPORT OF MOTION TO STAY THE CASE PENDING COMPLETION OF LIMITED JURISDICTIONAL DISCOVERY

COMES NOW, Plaintiff, DOUGLAS NELSON, by and through undersigned counsel, and hereby files his Reply in Support of his Motion to Stay the Case, including ruling on all outstanding motions, [D.E. 17] and [D.E. 18],[1] pending completion of 200 days of limited jurisdictional discovery. As grounds thereof, Plaintiff alleges as follows:

I.Contrary to Defendant’s assertions, Plaintiff met his initial burden to plead facts in support of jurisdiction.

This case involves a seafarer’s claims against Defendants for “Jones Act negligence,”[2] unseaworthiness,[3] “failure to provide maintenance and cure” [4], and “failure to treat.”

Plaintiff pled sufficient material facts to establish jurisdiction. In the Complaint, to establish the exercise of personal jurisdiction, Plaintiff succinctly pled that at all material times, Defendants (including Trinity), personally or through an agent: A) operated, conducted, engaged in or carried on a business venture in this state and/or county or had an office or agency in this state and/or county; B) were engaged in substantial activity within this state; C) Operated vessels in the waters of this state; D) Committed one or more acts stated in Florida Statutes §§ 48.081, 48.181 or 48.193; and E) [that] the acts of Defendants occurred in whole or in part in this country and/or state. Additionally, Plaintiff also alleged: “Defendants were engaged in the business of providing to the public crewmember placement services for yachting customers and selling, building, and chartering luxury yachts to customers. See D.E. 1, at ¶ 3.

Thus, contrary to Defendant’s assertions, Plaintiff met his initial burden to plead sufficient facts in the Complaint to establish the exercise of jurisdiction. Indeed, under the seminal Florida Supreme Court case of Venetian Salami Co., v. Parthenais, 554 So. 2d 499 (Fla. 1989), in order to meet this initial prima facie burden, a Plaintiff only needs to allege language of the long arm statute without pleading additional supporting facts. See Id., at 502 (“Initially, the Plaintiff may seek to obtain jurisdiction over a nonresident defendant by pleading the basis for service in the language of the [Florida long arm] statute without pleading the supporting facts ”). (Emphasis added). See also Milligan Elec. Co. v. Hudson Const. Co., 886 F. Supp. 845 (N.D. Fla. 1995) (“In applying the Florida long-arm statute, a district court is required to construe the statute as would the Supreme Court of Florida, since the reach of the statute is a question of state law”).

All in all, the only time the Plaintiff does have the burden to actually prove the basis upon which jurisdiction may be obtained is after Defendant files a Motion to Dismiss for Lack of Personal Jurisdiction. See Venetian Salami, at 554 So. 2d 502:

A defendant wishing to contest the allegations of the Complaint concerning jurisdiction or to raise a contention of minimum contacts must file affidavits in support of his position. The burden is placed upon the plaintiff to prove the basis upon which jurisdiction may be obtained.

Id., see also Future Technology Today, Inc. v. OSF Healthcare Systems, 218 F. 3d 1247 (11th Cir. 2000):

First, the plaintiff must allege sufficient jurisdictional facts in his complaint to initially support long arm jurisdiction before the burden shifts to the defendant to make a prima facia/em> showing of the inapplicability of the statute. If the defendant sustains this burden, the plaintiff is required to substantiate the jurisdictional allegations in the complaint by competent proof.

II.Trinity’s Motion to Dismiss for Lack of Personal Jurisdiction contains factual assertions regarding contacts with Florida, which Plaintiff cannot ascertain without the benefit of jurisdictional discovery.

In order to contest the jurisdictional allegations in the Plaintiff’s Complaint, on July 1, 2011, Defendant Trinity filed a Motion to Dismiss for Lack of Personal Jurisdiction, pursuant to Federal Rule of Civil Procedure 12(b)(2). [D.E. 17]. In support of its Motion, Defendant Trinity filed an affidavit by Marina Medley De Sa, a Director of Trinity. [D.E. 17 – 1]. In the affidavit, Ms. De Sa, declares, in part:

3. Trinity does not have any offices or employees in the State of Florida or the United States. Trinity does not carry on any business ventures in the State of Florida or United States. Trinity does not derive any income from businesses located in the State of Florida or from Florida residents.

5 Trinity has never availed itself of the jurisdiction of the Florida or the United States. Trinity does not participate in systematic and continuous transactions in the State of Florida. Trinity does not regularly solicit business or engage in any other persistent course of conduct in the State of Florida. Trinity does not regularly solicit business or engage in any other persistent course of conduct in the State of Florida. Trinity did not commit torturous acts in the State of Florida. Trinity has not breached a contract in the State of Florida or the United States. Trinity does not generate revenue from the United States.

Fraser Yachts Florida, Inc. has never been authorized to accept service of process on behalf of Trinity, and is not a “business agent” or registered agent for Trinity. Fraser Yachts Florida, Inc. has no degree of control over Trinity and does not have general authority to act for Trinity.

Id. Logically, Plaintiff cannot respond to these jurisdictional allegations or test the veracity of Ms. Medley De Sa’s statements, without the benefit of jurisdictional discovery.

In its response, Defendant Trinity seems to be inviting this Honorable Court and Plaintiff to simply take Ms. De Sa’s word for granted that “Trinity does not participate in systematic and continuous transactions in the State of Florida” and that “Trinity does not regularly solicit business or engage in any other persistent course of conduct in the State of Florida.” However, if that were the case, then any Defendant who regularly solicits and conducts business in Florida, could simply withhold information of its real contacts with the forum, and file an affidavit with boilerplate statements.

Precisely for this reason, pursuant to binding Eleventh Circuit precedent, Plaintiff has the right to test the veracity of the statements in Defendant’s affidavit, by conducting jurisdictional discovery.

II.Pursuant to binding Eleventh Circuit Court precedent Plaintiff has a right to conduct jurisdictional discovery in order to meaningfully respond to Defendant’s allegations of jurisdiction.

Nothing in Defendants Response [D.E. 25], changes the fact that it is well accepted that a right to jurisdictional discovery exists. See, e.g., Eaton v. Dorchester Dev., Inc., 692 F. 2d 727, 729–31 (11th Cir. 1982). Under Federal Rule 26(b)(1), “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense . . . .” Discovery is not limited to the merits of a case, as it is available to ascertain the facts bearing on issues such as jurisdiction or venue. See Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 n.13 (1978).

Specifically, “[i]f the jurisdictional question is genuinely in dispute and the court cannot resolve the issue in the early stages of the litigation, then discovery will certainly be useful and may be essential to the revelation of facts necessary to decide the issue.” Eaton, at 692 F. 2d at 730 n. 7 (11th Cir. 1982).

Thus,“‘[a] plaintiff faced with a motion to dismiss for lack of personal jurisdiction is entitled to reasonable discovery, lest the defendant defeat the jurisdiction of a federal court by withholding information on its contacts with the forum.’” Diamond Chem. Co. v. Atofina Chems., Inc., 268 F. Supp. 2d 1, 15 (D.C. Cir. 2003) (quoting El-Fadl v. Cent. Bank of Jordan, 75 F. 3d 668, 676 (D.C. Cir. 1996)) (emphasis added).

Furthermore, “Plaintiff is not required to rely exclusively upon a defendant’s affidavit for resolution of the jurisdictional issue where that defendant has failed to answer plaintiff’s interrogatories specifically directed to that issue. To hold otherwise would permit an advantage to a defendant who fails to comply with the rules of discovery.” Blanco v. Carigulf Lines, 632 F. 2d 656, 658 (5th Cir. 1980)[5]. See also Exhibit Icons, LLC, et. al., v. XP Companies, LLC, et. al., 2008 WL 616104 (S.D. Fla. 2008):

Eleventh Circuit precedent indicates that jurisdictional discovery is highly favored before resolving Federal Rule of Civil Procedure 12(b)(2) motions to dismiss for want of personal jurisdiction. See Eaton, 692 F. 2d at 731; see also Chudasma v. Mazda Motor Company, 123 F. 3d 1353, 1367 (11th Cir. 1997) (a motion to dismiss for lack of personal jurisdiction may require limited discovery so that a meaningful ruling can be made); Majd-Pourem> v. Georgiana Community Hosp., Inc., 724 F. 2d 901, 903 (11th Cir. 1984) (“[a]lthough the plaintiff bears the burden of proving the court’s jurisdiction, the plaintiff should be given the opportunity to discover facts that would support his allegations of jurisdiction”).

Id., at 2.

II.The scope of Plaintiffs discovery would be limited to test the veracity of each of the factual assertions Defendant has made in its affidavit. Plaintiff would do this by taking depositions, requesting documents and propounding interrogatories.

As set forth above, in support of its Motion for Lack of Jurisdiction, Defendant’s affidavit makes the following allegations: 1) Trinity does not have any offices or employees in the State of Florida or United States; 2) Trinity does not carry any business ventures in the State of Florida or the United States; 3) Trinity does not derive any income from businesses located in the State of Florida or from Florida residents; 4) Trinity does not regularly solicit business or engage in any other persistent course of conduct in the State of Florida; 5) Trinity has not breached a contract in the State of Florida or the United States; 6) Trinity does not generate revenue from the United States. [D.E. 17-1].

The scope Plaintiffs’ jurisdictional discovery would be limited to test the veracity of these statements.

Plaintiffs discovery should not be limited to just Trinity. In its Response [D.E. 25, pg. 13], Defendant argues that Plaintiff’s jurisdictional discovery should be limited only to Trinity and not include Defendant Fraser Yachts Florida, Inc. (a Florida Corporation). Unfortunately for Defendant Trinity, by making statements in its affidavit concerning the relationship between Trinity and Fraser Yachts Florida, Inc., Trinity has opened the door for Plaintiff to ascertain the veracity of those statements.

In fact, in its affidavit, at paragraph 7, Ms. Medley De Sa declares, on behalf of Trinity:

Fraser Yachts Florida, Inc. has never been authorized to accept service of process on behalf of Trinity, and is not a “business agent” or registered agent for Trinity. Fraser Yachts Florida, Inc. has no degree of control over Trinity and does not have general authority to act for Trinity.

Therefore, the scope of Plaintiff’s jurisdictional discovery should include looking into the relationship between Trinity and Fraser Yachts Florida, Inc. Plaintiff should be able to take depositions, propound interrogatories and request documents from both entities, in order to ascertain 1) whether Fraser Yachts Florida, Inc. is Trinity’s “business agent” in Florida and 2) whether Trinity has any degree of control or general authority over Fraser Yachts affairs in Florida.

Plaintiff anticipates that the jurisdictional discovery will reveal that Fraser Yachts Florida, Inc. (a Florida Corporation) is merely an agent through which Defendant Trinity conducts business in Florida.

It is generally true that a foreign corporation is not subject to personal jurisdiction in Florida simply because an affiliate of the corporation does business in the forum. See Meir ex rel. Meier v. Sun Intern. Hotels, Ltd., 288 F.3d 1246 citing Consolidated Dev. Corp. v. Sherritt, Inc., 216 F.3d 1286, 1292 (11th Cir. 2000). However, “if the subsidiary is merely an agent through which the parent company conducts business in a particular jurisdiction or its separate corporate status is formal only and without any semblance of individual identity, then the subsidiary’s business will be viewed as that of the parent and the latter will be said to be doing business in the jurisdiction through the subsidiary for purposes of asserting personal jurisdiction.” Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1069.4 (3d ed. 2002).

The Eleventh Circuit has dealt with similar circumstances in Meir ex rel. Meier v. Sun Intern. Hotels, Ltd., 288 F.3d 1246. There three foreign Defendants argued that their local affiliate was a separate entity merely under a service contract with the foreign entities. See id. In Meir the Plaintiff had the benefit of developing and presenting evidence to the court in the form of deposition testimony and discovery that demonstrated a greater link. Ultimately the Court in Meir found that the local affiliate, a booking agency, provided about half of all bookings to the foreign corporation hotel. Persuaded by this as well as other evidence the court ruled the local affiliate was merely an agent by which the foreign corporation was doing business in the forum and that personal jurisdiction was thus warranted. Id.

III. Plaintiff cannot meaningfully respond to Defendant’s forum non conveniens assertions without the benefit of jurisdictional-type discovery.

In its Motion to Dismiss [D.E.]., Defendant also moves to Dismiss this case pursuant to the doctrine of forum non conveniens. However, because this is an admiralty case, in order for the Court to make a determination as to forum non conveniens, the Court must hold an evidentiary hearing regarding whether “Defendant has operational business contacts with the United States.”

Defendant forum non conveniens argument is based on the Laurizen-Rhoditis forum non conveniens analysis applied by federal Courts sitting in admiralty. Under the Lauritzen-Rhoditis analysis, if U.S. law applies in this action: Defendant’s Motion to dismiss on grounds of forum non conveniens must be denied. See Szumlicz v. Norwegian American Line, Inc., 698 F. 2d 1192 (11th Cir. 1983) and Membreno v. Costa Crociere, 347 F. Supp. 2d 1289 (S.D. Fla. 2004) (holding that if United States law applies, the case cannot be dismissed for forum non conveniens and the American court must retain jurisdiction rather than delegate the controversy to a foreign tribunal). (Emphasis added). To establish the applicability of U.S. law,[6] the Lauritzen-Rhoditis “choice-of-law test was developed by the United States Supreme Court in the seminal case of Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306 (1970). Under Rhoditis, the Court must look at Defendant’s ‘operational business contacts with the United States,’ and if those contacts satisfy the test, U.S. law must apply. It is therefore implicit that the test calls for an in-depth and detailed factual analysis of Defendants business operations in the United States, including but not limited to: a review of its contacts with domestic actors, the number of times Defendant’s vessels use U.S. ports, duties and number of U.S. based employees, ownership and/or control of domestic actors, number and types of U.S. based bank accounts, etc.[7] [8]

In fact, in support of the portion of its Motion dealing with forum non conveniens, Defendant Trinity makes the following factual assertions: 1) “Trinity is a Bermudan Company with base of operations in Brazil;” 2) “it has no offices in the United States;” 3) its “management decisions are conducted and inextrinsicably tied to Brazil;” 4) “There is no evidence that Trinity or Ship-owners have a base of operations in the United States.”

Thus, like in the case of the statements Defendant Trinity made regarding personal jurisdiction, in the context of forum non conveniens this Honorable Court or Plaintiff should not take the statements Defendant is making for granted. Instead, Plaintiff should be allowed to test the veracity of these statements by conducting jurisdictional discovery.

Indeed, since ruling on a motion to dismiss for forum Non Conveniens requires the Court to conduct a fact-based inquiry, the Supreme Court has noted that “the district Court is accorded substantial flexibility in evaluating such motions, and each case turns on its facts.” Van Cauwenberghe v. Biard, 486 U.S. 517, 529 (1988). Considering and weighing these facts requires the Court to “scrutinize the substance of the dispute between the parties to evaluate what proof is required and to determine whether the pieces of evidence cited by the parties are critical, or even relevant to the parties cause of action and to any potential defenses to the action.” Van Cauwenberghe, 486 U.S. at 528. This rather daunting task is hardly one to be undertaken without adequate information. In Re Bridgestone/Firestone Inc., 131 F. Supp. 2d 1027 (S.D. Ind. 2001). Therefore, it is [necessary][9] for Courts to permit discovery on facts relevant to forum non conveniens motions. Id. (Emphasis added).

Federal Courts across the country share the view that some discovery is necessary to the consideration of a motion to dismiss for forum non conveniens. For instance, in Alfadda v. Fenn, 1994 U.S. Dist. LEXIS 18267 (S.D. N.Y. 1994), the Court ordered discovery after concluding that resolution of a motion to dismiss on the basis of forum non conveniens would likely depend on the results of this discovery, which one of the parties had not yet conducted. Further, as the Eleventh Circuit pronounced in C.A. La Seguridad v. Transytur Line, 707 F. 2d 1304, 1308-10 (11th Cir. 1983), a ruling on a motion to dismiss from the district court must be vacated and remanded if the district court cannot specify facts sufficient to support its forum non conveniens dismissal. See also Lacey v. Cessna Aircraft Co., 862 F. 2d 38, 44-45 (3d Cr. 1988) (remanding forum non conveniens dismissal because defendants did not submit sufficient information to allow district court to properly examine motion).

All in all, the same limited discovery aimed at establishing personal jurisdiction over Trinity can be used to ascertain whether Trinity has a “base of operations in the United States,” for purposes of the Lauritzen-Rhoditis forum non conveniens analysis. See Popescu v. CMA-CGM, Case No. 09-20860-CIV-ALTONAGA/Brown (S.D. Fla. 2009) [D.E. 32] (granting Plaintiffs request to take jurisdictional discovery in order to respond to Defendant’s Motion to Dismiss for Forum Non Conveniens; see also Vasquez v. YII Shipping, Ltd., 11-60248-CIV-ALTONAGA/Simonton (S.D. Fla. 2011) [D.E. 35] (same). [10]

IV.Conclusion.
For the aforementioned reasons, Plaintiff respectfully moves this Honorable Court to stay the case, including ruling on all outstanding motions, pending completion of 200 days of limited jurisdictional discovery.

 


[1] Currently pending before this Honorable Court are Defendant Trinity Overseas Services Limited Motions to Dismiss pursuant to Rule 12(b)(2), the doctrine of forum non conveniens, and Rule 12(b)(4) [D.E. 17]. Additionally, pending before this Honorable Court is Defendants Crew Network Inc., Fraser Yatchts Florida, Inc. and Fraser Yacht’s Worldwide, Motions to dismiss pursuant to Federal Rule 12(b)(6) and the doctrine of forum non conveniens. [D.E. 18].

[2] The Jones Act, 46 U.S.C. §30104, confers on seamen the statutory right to sue their employers in an American Court for the negligence of fellow crewmembers. The Jones Act was passed in 1920 to grant a seaman a cause of action against his employer for negligence.

[3] Pursuant to the doctrine of unseaworthiness, the vessel and her owner are liable for injuries received by a seaman in consequence of the unseaworthiness of the ship, or a failure to supply and keep in order the proper appliances appurtenant to the ship. The Osceola, 189 U.S. 158 (1903). For purposes of Unseaworthiness, the liable ship-owner defendant is “the person who had operational control of the ship at the time the condition was created or the accident occurred.” See Martin v. Walk, Haydel and Associates, Inc., 742 F. 2d 246 (5th Cir. 1984).

[4] “Maintenance and Cure is an ancient United States common-law maritime remedy for seamen who are injured while in the service of the vessel. The Eleventh Circuit has described the action as follows: “The seaman’s action for maintenance and cure may be seen as one designed to put the sailor in the same position as he would have been had he continued to work: the seamen receives a maintenance remedy because working seamen normally are housed and fed aboard ship; he recovers payment for medical expenses in the amount necessary to bring him to maximum cure; and he receives an amount representing his unearned wages for the duration of his voyage or contract period. Flores v. Carnival Cruise Lines, 47 F. 3d 1120 (11th Cir. 1995).

[5] The decisions of the United States Court of Appeals for the Fifth Circuit, as that court existed on September 30, 1981, handed down by that court prior to the close of business on that date, shall be binding as precedent in the Eleventh Circuit, for this court, the district courts, and the bankruptcy courts of the circuit. Boner v. Pritchard, 661 F. 2d 1206, 1207 (11th Cir. 1981) (en banc).

[6] U.S. Law such as whether the Jones Act and the General Maritime Law of the United States applies.

[7] Since at this stage Plaintiff does not have the benefit to establish this information, long standing jurisprudence provides Plaintiff with the opportunity to conduct limited discovery to ascertain Defendant’s ‘operational contacts with the United States.’ Without the ability to conduct such discovery, Plaintiff is unable to properly respond to Defendant’s Motion to Dismiss on forum non conveniens grounds.

[8] The fundamental difference between the Florida FNC test and the Federal Admiralty FNC test, is that the Federal Admiralty Court’s examination begins with the Lauritzen-Rhoditis choice of law analysis. Florida Courts have held that the Lauritzen-Rhoditis choice of law analysis is not required in Florida Courts.

[9] The Bridgestone Court uses the verb “behooves” in the opinion. Merriam Webster’s dictionary defines ‘behooves,’ as “to be necessary, proper or advantageous.”

[10] Plaintiff anticipates jurisdictional discovery will reveal that Defendant Trinity has “extensive operational contacts” in this country, similar to the facts of Hellenic Lines Ltd. v. Rhoditis, 398 U.S. 306 (1970).

In Rhoditis, the Supreme Court emphasized that a base of operations is not merely where the ship is flagged or an owner is incorporated. Rather, the Courts stressed the need to look beyond corporate formalities to examine the shipowner’s operational contacts with the United States. Rhoditis, at 310. The Courts specifically recognized that if “the liberal purposes of the Jones act are to be effectuated, the façade of the operation must be considered as minor, compared with the real nature of the operation, and a cold objective look at the actual operational contacts that the ship and owner have with the United States. Id. (Emphasis Added).

In Rhoditis, a Greek seaman, employed under a Greek contract signed in Greece, sought recovery for injuries sustained while working on a ship sailing under a Greek flag. Although the Defendant was a Greek corporation, more than 95% of its stock was owned by a United States permanent resident and domiciliary who managed the corporation out of New York. Further, the bulk of the operation’s income derived from the transportation of cargo either originating or terminating in the United States. The Court held that Defendant’s substantial contacts with the United States by themselves and alone, required the applicability of U.S. law, and therefore, forum non conveniens dismissal was improper. The Court declared:

We see no reason whatsoever to give the Jones Act a strained construction so that his alien owner, engaged in an extensive business operation in this country, may have an advantage over citizens engaged in the same business by allowing him to escape the obligations and responsibility of a Jones Act “employer.” The flag, the nationality of the seaman, the fact that his employment contract was Greek, and that he might be compensated there, are in the totality of the circumstances of this case, minor weights in the scales compared with the substantial and continuing contacts that this alien owner has with this country. Id., Rhoditis, at 310. (Emphasis added).