Case Information
*1 UN ITED STA TES D ISTRICT CO URT SO UTH ERN DISTRICT O F FLO R ID A M IAM I DIV ISIO N
CA SE N O . l5-CV-23975-JLK TEXTILE U SA , IN C.,
Plaintiff,
TJB VINA CO ., LTD ., B& Y CO ., and
BYUN G N AM LEE,
Defendants.
O RD ER G M NTING M O TIO N TO O UA SH SERV IC E TH IS CAU SE com es before the Court on D efendant TJB V IN A C O ., LTD .'s (kiTJB'') M otion to Dismiss Complaint, or in the Altem ative, M otion to Quash (the Atslotion'') (DE 7).1 The Court has additionally considered Plaintiff TEXTILE USA5 1NC.'s (li-fextile'') Response to the M otion (DE 16), and Defendant's Reply in Support of the M otion (DE 33).
The instant M otion seeks dism issal of the Com plaint for lack of personal jurisdiction, failure to perfect service, and failure to state a claim . As the Court is in agreem ent that Plaintiff has failed to perfect service on D efendant, the Court declines to consider the additional grounds raised by the M otion.
' The M otion w as initially filed on behalf of a1l three nam ed D efendants . H ow ever, Defendant TJB, through its Reply in Support of the M otion (DE 33), requested that the M otion be considered only w ith respect to Defendant TJB .
BA CK G R O UN DZ
Plaintiff Textile is a Florida corporation w ith its principal place of business in M edley, Florida. D efendant TJB is a V ietnam ese lim ited liability com pany w ith its principal place of business in Viet Tri City , Vietnam. DE 1-1 at l0, !! 1, 2. Defendant B&Y Co. (%:B&Y) is a Korean lim ited liability company with its principal place of business in Incheon, Korea. 1d., ! 3. Defendant Byung Nam Lee, an individual, is a citizen of K orea, as well as the sole shareholder and president of TJB and B& Y . f#. at 1 1, ! 4 .
Pursuant to procurem ent agreem ents w ith Diageo, a non-party, Textile has been m lm ufacturing em broidered bags for D iageo's Crown Royal brand of whiskey since 2004. f#. at 12- 13, !! l 5- l7. On April 30, 2008, Textile entered into a five-year M anufacture and Supply A greem ent w ith TJB and the other nam ed but not-yet-served Defendants, B&Y and Lee. See id. at 13, ! 22. Pursuant to the M anufacture and Supply Agreem ent, Textile arranged for raw m aterials to be delivered to D efendants, and Defendants provided sew ing and other assem bly services for the bags. 1d. Invoices attached to the Com plaint show com pleted bags w ere shipped by B& Y Co. from V ietnam directly to Canada, w ith Textile listed as the consignee ()f the shipm ent. 1d. at 27-50.
The M anufacture and Supply Agreem ent contains contsdentiality and non- eom petition provisions, w hich prohibit Defendants from Sidirectly or indirectly manufacturging) and supplyking Crown Royal bags) to Diageo or any of its aftsliates.'' 1d. 2 At the motion to dism iss stage a11 w ell-pleaded factual allegations in the V erified Complaint (DE 1- 1 at 10-26) are accepted as true.
at 1 1 5- l6, jj 7, 8. The prohibition on competition extends for three years following the term ination of the M anufacture and Supply A greem ent. f#. Additionally, on M arch 29, 20 1 1 , Textile entered into a three-year N on-circum vention A greem ent w ith D efendants, whieh prohibits Defendants from tidirectly or indiredly, approachging) or solicitgingl with thc intent of manufacturing or supplying (Crown Royal bagsj . . . for or to Diageo Canada, lnc. or any of its afflliates.'' f#. at 120, ! 2.
Beginning in late 2013, the parties' relationship began to sour w hen D efendant Lee iûadvised Textile (1 of Defendants' intent to contact Diageo directly and attempt to meet in an effort to form a direct business relationship with Diageo. . '' 3 Id at l 5-16 ! 34. , Subsequently, in N ovem ber, 2014, D efendants notified Textile that they w ere term inating their relationship w ith Textile, and would only provide assem bly services for Textile for the next three m onths. 1d. at 16, ! 37. Defendants then contacted Diageo directly by sending it an em ail w ith a new , proposed M anufacture and Supply Agreem ent, and inform ed D iageo that Defendants w ould im m ediately cease assem bling Crow n Royal bags and refuse to release any shipm ents unless Textile executed the Agreem ent immediately and without m odification. 1d. at 17-18, ! 46.
A fter Textile had executed the agreem ent tiunder duressy'' D efendants dem anded that Textile provide them w ith Textile's raw m aterial supply chain inform ation. 1d. at 19, !( 55, 56. Because Defendants had also threatened to imm ediately cease manufaduring the Crown Royal bags and thereby cause Textile to default under its procurem ent 3 SsAlthough the M anufacture and Supply Agreem ent expired on A pril 30 2013, the parties inform ally extended the term s thereof and Defendants . . . continued to provide services . . . through November, 2014.99 DE 1- 1 at 16, ! 36.
agreem ents w ith D iageo unless Textile provided the supply chain inform ation , Textile supplied the inform ation Slunder duress.'' 1d. On April 30, 2015, D iageo sent notice to Textile of its intent not to renew its procurem ent agreem ent w ith Textile and of its cancellation of the portions of its prior order that were due for delivery from July , through September, 20 15. 1d. at 20, ! 61. ln M ay, 20 15, Defendants notifed Textile and Textile's supply chain that D efendants w ould be taking Textile's place as the new manufacturer of Diageo's Crown Royal bags. 1d., !( 62.
Based upon the facts recited above, Plaintiff brought suit against D efendants in the Circuit Court of the 1 1th Judicial Circuit in and for M iam i-D ade County, Florida, alleging claim s for breach of contract (Count 1), tortious interference with an existing contract (Count 11), tortious interference with a business relationship (Count 111), theft of intellectual property (Count IV), and unjust enrichment (Count V). Plaintiff served Defendant TJB via substituted service on the Secretary of State of Florida, pursuant to j 48.18 1, Florida Statutes. Thereafter, Defendants removed this action to the Southern District of Florida and tsled the instant M otion.
Plaintiff alleges this Court has jurisdiction over Defendants pursuant jj 48. 1 8 1(3) and 48. 193, Florida Statutes, due to Defendants' operation of a business in Florida and their substantial and not isolated activities within Florida. . , 4 Id at 1 1 !J 8 . 4 W hile Plaintiff failed to cite to a specifc subsection j 48.193(l)(a)(2), Florida Statutes, extends the jurisdiction of Florida courts to entities ççoperating, conducting, engaging in, or carrying on a business or business venture in this state . . . .'' *5 Plaintiff additionally alleges jurisdiction is appropriate pursuant to j 48.193(1)(a)(6)(b),5 Florida Statutes, because Defendants allegedly caused injury to Textile in Florida and the produds m anufactured by D efendants w ere used or consum ed in Florida in the ordinary course of commerce, trade, or use. f#,, !( 9.
DISCUSSIO N
Defendant TJB has never been personally served with the Com plaint. Rather, Plaintiff served TJB via substituted service upon the Secretary of State of Florida, pursuant to j 48.1 8 1( 1), Florida Statutes. See DE 16 at 25. Defendant argues Plaintiff s attem pt at substituted service should be quashed because D efendant w as not operating or carrying on a business venture in Florida, such that it w ould be am enable to substituted service.
Since Defendant was not personally served, jurisdiction cannot be acquired via Florida's long-arm statute, j 48. 193, Florida Statutes. See Underwood v. Univ. ofKy, 390 So. 2d 433, 434 (F1a. 3d DCA 1980) (tTor service t)o be effective under Section 48.193, the defendant must be personally served out-of-state pursuant to 48. 194 . . . .''). Therefore, if this Court has personaljurisdiction over Defendant, it must arise from 48. l 8 1( 1), Florida Statutes.
Section 48.181(1) states,
The acceptance by . . . foreign com orations . . . of the privilege extended by 1aw to nonresidents and others to operate, conduct, engage in, or can'y on a 5 l its Response to the M otion n Plaintiff states çigtlo be clear, Textile gl does not assert personal jurisdiction under j 48.193(1)(a)(6).'' DE 16 at 22. While this statement is verifiably w rong, as show n by the allegations of the Com plaint, the Coul't accepts it as Plaintift's concession that j 48. 193(1)(a)(6) is inapplicable to the instant action.
business or business venture in the state . . . constitutes an appointm ent by the . . . foreign corporations of the Secretary of State of the state as their agent on whom a1l process in any action or proceeding against them . . arising out of any transaction or operation connected w ith or incidental to the business or business venture m ay be served. The acceptance of the privilege is signification of the agreem ent of the . . . foreign corporations that process against them which is so served is of the sam e validity as if served personally on the . . . foreign corporations.
j 48. 181, Fla. Stat. As the Complaint does not allege Defendant has an office in Florida, to satisfy the elementsof j48. 18 1, Plaintifps jurisdictional allegations must establish the following: 1) Defendant accepted the privilege to operate, conduct, engage in, or carry on their business in Florida and 2) this action arises out of a transaction or operation connected w ith or incidental to D efendant's business activities in Florida.
In support of its argum ent that the Com plaint adequately pleads facts supporting the existence of personal jurisdiction over Defendant, Plaintiff points to the following allegations: 1) Defendant Lee traveled to Florida itand engaged in at least one business meeting concenaing the business relationship that is the subject of this Action'' and 2) Sûgals a result of their consignment and/or sale of the Crown Royal bags to Textile gl and/or DIAGEO in the State of Florida, Defendants . . . are operating, conducting, engaging in, or carrying on a business or business venture in the State of Florida.'' DE 16 at 15, 17; DE 1-1 at 1 1- 12, !! 7, 8.
The allegations identified by Plaintiff are insufficient to establish Defendant w as operating,conducting, engaging in,or carrying on a business in Florida. The first allegation does not tend to establish Defendants were operating a *7 business in Florida even if the agreem ent to enter into a business venture occurred in Florida. The second allegation is m erely a conclusion, A 11 perform ance relating to the agreem ent occurred outside the United States, w ith raw m aterials being shipped from undisclosed locations to Defendant in Vietnam and/or K orea, and finished products being delivered from Korea to D iageo in Canada. A ccordingly, the allegations of the Complaint are insufscient to justify this Court's exercise of personal jurisdiction over Defendant TJB following substituted service pursuant to j 48. 1 8 141), Florida Statutes, and senzice upon Defendant TJB must be quashed.
CO N CLUSION
Accordingly, it is O RD ER ED , A DJUD G ED , and D ECREED that D efendant TJB V INA CO., LTD 'S M otion to Dism iss Com plaint, or in the A lternative, M otion to Quash (DE 7) be, and the same is, hereby GRANTED and substituted service upon Defendant TJB VINA CO ., LTD be, and the same iss hereby QUASHED. Plaintiff SH A LL personally serve Defendant TJB V INA CO ., LTD in accordance w ith Fed. R. Civ. P. 4 within sixty (60) days from the date of this Order.
D ON E and O RD ER ED in Cham bers at the Jam es Lawrence K ing Federal Justice Building and United States Courthouse, M iam i, Florida this 28th day of Septem ber, 2016.
ES LA N CE K IN G UN ITED STATES D ISTRICT JUD SO UTHERN DISTRICT OF FLO cc: A11 Counsel of Record