Don't Look Media LLC v. Fly Victor Limited ( 2021 )

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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 20-10779
________________________
D.C. Docket No. 0:19-cv-61555-AHS
DON’T LOOK MEDIA LLC,
a Delaware Limited Liability Company,
Plaintiff - Appellant,
versus
FLY VICTOR LIMITED,
a company incorporated under the Laws
of England and Wales,
ALYSSUM GROUP LIMITED,
a company incorporated under the Laws
of England and Wales,
ALYSSUM HOLDINGS LIMITED,
a company incorporated under the Laws
of England and Wales,
CLIVE HENRY JACKSON,
an individual,
BERNARDUS VORSTER,
an individual,
DAN NORTHOVER,
an individual,
JOHN DOE(S),
an unknown person(s)/corporation(s),
Defendants - Appellees.
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________________________
Appeal from the United States District Court
for the Southern District of Florida
________________________
(June 4, 2021)
Before JILL PRYOR, NEWSOM, and MARCUS, Circuit Judges.
MARCUS, Circuit Judge:
This dispute concerns a deal gone bad. Plaintiff Don’t Look Media, LLC
(“DLM”) licensed its private jet booking website to defendant Fly Victor Ltd. in
exchange for Fly Victor’s agreement to invest in increasing traffic to the site and to
share booking revenues with DLM. According to DLM, Fly Victor didn’t do any
of that, and never intended to. DLM sued Fly Victor, some of its directors and
officers, and related entities in the Southern District of Florida. Among other
things, DLM alleged that the directors and officers had violated the Racketeer
Influenced and Corrupt Organizations Act (“RICO”) by defrauding DLM of the
site revenues and laundering these ill-gotten gains through closely held firms. The
district court dismissed the case for a lack of personal jurisdiction and because the
revenue sharing agreement’s forum selection clauses mandated litigation of the
dispute in an English court.
We affirm for two independently sufficient reasons. First, for a statutory
basis for personal jurisdiction, DLM relies only on a RICO provision that allows
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for service of process in any United States judicial district. But this statute cannot
provide personal jurisdiction because DLM did not serve any party within the
United States. It only attempted service on the defendants in a London office
building. Moreover, the forum selection clauses are enforceable, plainly apply to
DLM’s claims, and require dismissal in favor of an English forum.
I.
A.
Broward County, Florida-based Don’t Look Media, LLC owns
PrivateJet.com, a website booking platform for private jet operators. Customers
use the website to arrange and book flights with individual providers. As of July
2015, DLM was licensing the PrivateJet platform to Jetsmarter.com, a private jet
services broker and a competitor of defendant Fly Victor Ltd. (“Fly Victor”). Fly
Victor is a London, England-based private jet and air charter broker that develops
websites and mobile applications to reach clients looking to charter private jets.
DLM grew dissatisfied with Jetsmarter and retained Nelson Rocha as a
consultant to explore the possibility of partnering PrivateJet.com with an
alternative company. Rocha reached out to Fly Victor with a proposal for Fly
Victor to develop and manage the PrivateJet domain and to share the resulting
revenues with DLM. In July 2015, DLM and Fly Victor executed a Revenue
Sharing Agreement (“RSA”). The RSA assigned to Fly Victor “the exclusive
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license and rights to design, manage, build and operate PrivateJet” for three years.
In exchange, Fly Victor agreed “to design and build PrivateJet by continuously
adding content and search engine optimization on both a newly-developed landing
page and website, which would include a state-of-the-art booking platform.” Fly
Victor promised it would perform according to “Good Industry Practice” and in
compliance with Federal Aviation Administration and United States Department of
Transportation regulations. Fly Victor also agreed to invest in PrivateJet’s revenue
generation potential: “it would spend at least [$2,500.00] per month on Google
Pay-Per-Click advertising starting” in November 2015. Finally, Fly Victor agreed
to share with DLM forty percent of the gross profits from initial bookings on
PrivateJet and ten percent of the gross profits from all subsequent bookings. But if
site revenues did not reach certain monthly minimum targets, Fly Victor would
instead pay DLM $2,500 per month beginning in the sixth month of the contract.
This figure increased to $5,000 per month beginning in the twenty-fifth month of
the contract.
A seemingly straightforward business arrangement. But according to DLM,
all was not as it appeared. DLM claims that some of the defendants -- Fly Victor
CEO and Director Clive Henry Jackson, Fly Victor Accountant and Principal
Director Bernardus Vorster, Fly Victor Chief Marketing Officer Dan Northover,
and unknown John Doe insider investors in Fly Victor -- “collaborated prior to and
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during the drafting of the RSA for purposes of defrauding [DLM] as these
[d]efendants had no intention of Fly Victor honoring any of its obligations under
the RSA.” The RSA was a “fraudulent inducement for [DLM] to license PrivateJet
to . . . Fly Victor.”
This scheme included the addition of allegedly unnegotiated venue and
choice of law clauses intended to “make it difficult or impossible for [DLM] to
enforce its rights once the fraud was discovered.” These clauses read:
13. CHOICE OF LAW
13.1 This Agreement, and any issues or disputes arising out of or in
connection with it (whether such disputes are contractual or non-
contractual in nature, such as claims in tort, for breach of statute or
regulation or otherwise) shall be governed by and construed in
accordance with English law and the parties hereby submit to the
exclusive jurisdiction of the English Courts.
...
22. LAW AND JURISDICTION
...
22.2 The courts of England shall have exclusive jurisdiction to
adjudicate any dispute which arises out of or in connection with this
Participation Agreement, provided that Victor shall be entitled to take
proceedings relating to this Participation Agreement in any other
jurisdiction. 1
In December 2017, defendants Alyssum Group and Alyssum Holdings were
formed as Fly Victor’s parent corporations, allegedly in order to defraud DLM and
others by hiding Fly Victor’s revenues.
1
The term “Participation Agreement,” which does not appear elsewhere in the contract, seems to
be simply a reference to the RSA.
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Early on, the contractual relationship seemed to be going well. In
September 2015, Jackson emailed DLM’s sole member Louis Spagnuolo that he
believed the project was “all in hand” and indicated that Northover was responsible
for the PrivateJet project. In November, a DLM representative emailed Northover
“to see how things were progressing.” Northover responded that his team had
“started organically rebuilding traffic to the site,” and provided some detail on site
visit numbers and the sources of the visits. He was optimistic about increasing
traffic: “There are some big gains to be made in organic traffic and once the latest
product iterations are in place, we should start work on improving our [search
engine optimization] and introducing paid search campaigns.” Though traffic was
“small numbers right now,” Northover was “confident [it would] build up over the
coming weeks.”
According to DLM, this update was misleading. Northover had no reason to
believe “big gains” were on the way because Fly Victor was not investing in
generating site traffic -- contrary to its contractual promise. Spagnuolo sent other
emails from July 2015 to August 2018 inquiring about the status of payments Fly
Victor owed DLM, but “never seemed to get a straight answer.” On July 25, 2018,
Spagnuolo called Northover and told him that DLM “had not been paid for any
lead generations for three years” and that he believed “Fly Victor was in material
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breach of the RSA.” In response, Northover stated that “he had not been able to
get management’s full backing for the project.”
The RSA’s thirty-six-month term expired on July 4, 2018, and Fly Victor
notified DLM that it was not interested in renewing the agreement. DLM alleges
that on August 21, 2018, Alyssum Group’s “lawyer Stephen Jones wrote DLM an
email on behalf of . . . Fly Victor which stated -- falsely -- that DLM allegedly
failed to complain about not getting paid during the term of the RSA” and that
DLM’s “claims for breach of contract were [therefore] non-existent.”
DLM claims that even though PrivateJet “created multi-million-dollar
revenues” for Fly Victor, DLM “has not received one dollar in remunerations from
these revenues as required by the RSA.” However, Fly Victor did make at least
some payments to DLM. Spagnuolo -- DLM’s sole member -- said in an affidavit
that from 2016 through 2018, “DLM received wire transfers from [Fly Victor’s]
U.S. Bank account, American Riviera Bank for base payments under the RSA.”
And Fly Victor’s Jackson offered an affidavit and invoices explaining that the
PrivateJet site revenues never reached the minimum target volumes, so the RSA
required Fly Victor to pay only the minimum monthly payments, which it did.
B.
DLM filed suit in the Southern District of Florida against Jackson, Vorster,
Northover, the John Does, Fly Victor, Alyssum Group, and Alyssum Holdings.
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Fly Victor’s Miami-based legal counsel informed DLM that it was not authorized
to accept service on behalf of any defendant, so DLM hired a process service firm
to serve the defendants in England. The firm served Fly Victor, Alyssum Group,
and Alyssum Holdings at Fly Victor’s London office. The server was unable to
locate Northover, Jackson, or Vorster, so it left their documents together with the
service documents for the company defendants at the Fly Victor reception desk.
About a month later, Fly Victor’s counsel informed DLM’s attorney that he could
“cancel any further efforts [of the] process server, as we will not be contesting
service of process in our motions.” At this point, the operative complaint did not
rely on RICO’s nationwide service of process provision to plead personal
jurisdiction; instead, it invoked personal jurisdiction under Florida’s long-arm
statute, Fla. Stat. § 48.193.
Eventually, DLM amended its complaint to allege personal jurisdiction
based on RICO’s nationwide service of process provision. The amended
complaint set out ten counts. First, DLM brought civil RICO claims against
Jackson, Vorster, Northover, and the John Does (the “Individual Defendants”)
pursuant to 18 U.S.C. § 1962(c). DLM alleged that the Individual Defendants had
participated in the affairs of both a legal entity enterprise, Fly Victor Ltd. itself,
and an association-in-fact enterprise comprised of the Individual Defendants,
Alyssum Group, Alyssum Group attorney Stephen Jones, and Alyssum Group
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director Alexis Sozonoff working together for the common purpose of defrauding
DLM and Fly Victor’s investors. As for a pattern of racketeering activity, the
Individual Defendants allegedly engaged in “multiple acts” of wire fraud in
violation of 18 U.S.C. § 1343 and money laundering in violation of 18 U.S.C. §§
1956, 1957. See 18 U.S.C. §§ 1961(1), (5).
The alleged wire fraud included making “materially false” interstate email
and telephone statements to the effect that:
1) Defendant Fly Victor would pay [DLM] revenue shares for all leads
generated by PrivateJet;[] (2) Defendant Fly Victor was actively
working on its contractual obligations subsequent to the entry of the
RSA; and (3) stating to [DLM] that Defendant Fly Victor never
received one single lead from PrivateJet in three years.
Specifically, DLM pointed to the emails and telephone communications from
Northover and Stephen Jones described above, which Jackson had allegedly
directed. Northover’s representations about website traffic and “big gains”
expected from organic traffic were allegedly false. So was his 2018 statement that
Fly Victor management had never fully backed the collaboration, and the same
went for Jones’s claim that DLM had never complained about Fly Victor’s lack of
payment.
The money laundering allegations related to Fly Victor’s alleged scheme to
use the “substantial revenues through leads generated by PrivateJet” to “‘pump
up’” Fly Victor’s “health and value . . . in order to lure unsuspecting private equity
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investors to infuse various rounds of capital funding.” These revenues resulted
from illegal activity, namely the wire fraud involved in deceiving DLM out of the
revenue share payments owed. To disguise the funds’ illegal nature, the Individual
Defendants characterized them as “consulting” fees and paid them to companies
they or close associates controlled. Some of these companies were
undercapitalized or are in liquidation. Fly Victor also purportedly purchased and
created shell company alter egos to hide the PrivateJet revenues. Count 2 alleged a
conspiracy to violate RICO based on the same scheme and named the same
Individual Defendants. See 18 U.S.C. § 1962(d). The remaining counts raised
Florida law claims for conversion, fraudulent transfers, fraudulent
misrepresentations, negligence, breach of fiduciary duty, tortious interference with
business advantage, and breach of contract against various groupings of the
Individual Defendants, Fly Victor, Alyssum Group, and Alyssum Holdings.
The defendants moved to dismiss the complaint pursuant to Federal Rules of
Civil Procedure 4(e), 12(b)(2), 12(b)(3), and 12(b)(6). They claimed that the
Southern District of Florida lacked personal jurisdiction over them and that venue
was improper due to the RSA’s forum selection clauses, which provided for
exclusive jurisdiction in the courts of England. The defendants also argued that
DLM had failed to state a claim for tortious interference with business advantage.
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The district court granted the motion to dismiss on personal jurisdiction and
forum selection clause grounds. The court held that while RICO provided for
personal jurisdiction based on nationwide service of process, DLM had failed to
state a colorable RICO claim and therefore could not take advantage of this
provision. DLM had not plausibly identified any predicate acts of racketeering or
sufficiently alleged the conduct of an enterprise. Moreover, DLM’s allegations
“fail[ed] to establish even a weak connection” between the defendants and “any
state.” Thus, the Fifth Amendment Due Process Clause also barred the court from
exercising personal jurisdiction. The district court further held that the RSA’s
forum selection clause was mandatory and required dismissal. Accordingly, the
court dismissed the entire action without prejudice. DLM’s timely appeal
followed.
II.
We affirm the district court’s dismissal for two independently sufficient
reasons. First, even assuming that DLM’s RICO allegations are sufficiently
colorable to invoke RICO’s nationwide service of process provision, DLM did not
serve any party in accordance with that provision. RICO therefore does not supply
a statutory basis for personal jurisdiction in this action, and DLM has not offered
any alternative statutory basis. Second, the forum selection clauses mandate
dismissal.
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A.
We begin with the district court’s dismissal for lack of personal jurisdiction,
which we review de novo, accepting the allegations in the complaint as true. It is
by now almost axiomatic that a plaintiff bears the burden of establishing a prima
facie case of personal jurisdiction, meaning it must present enough evidence to
withstand a motion for a directed verdict. When a defendant submits non-
conclusory affidavits to controvert the allegations in the complaint, the burden
shifts back to the plaintiff to produce evidence to support personal jurisdiction.
Finally, when the complaint and plaintiff’s affidavits conflict with the defendant’s
affidavits, we draw all reasonable inferences in favor of the plaintiff. Stubbs v.
Wyndham Nassau Resort & Crystal Palace Casino, 447 F.3d 1357, 1360 (11th Cir.
2006).
In order for the district court to exercise personal jurisdiction over the
defendants, an applicable statute must first confer personal jurisdiction. See SEC
v. Marin, 982 F.3d 1341, 1349 (11th Cir. 2020). Then, the court must determine
that the exercise of jurisdiction comports with due process. Id. For a statutory
basis, DLM relies only on the RICO nationwide service of process provision found
in 18 U.S.C. § 1965. 2 When “a federal statute provides for nationwide service of
2
The complaint also references the Florida long-arm statute, but DLM argued in district court
only in passing that this statute provided for personal jurisdiction, and it does not so argue on
appeal. DLM has therefore abandoned any claim for personal jurisdiction arising under the
Florida long-arm statute. Access Now, Inc. v. Sw. Airlines Co., 385 F.3d 1324, 1330–31 (11th
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process, it becomes the statutory basis for personal jurisdiction over a person
served according to the statute.” Id. (internal quotation marks and citation omitted
and emphasis added). In that case, “service of process constitutes the vehicle by
which the court obtains [personal jurisdiction].” SEC v. Carrillo, 115 F.3d 1540,
1543 (11th Cir. 1997) (internal quotation marks and citation omitted).
The problem in this case is that RICO does not provide for personal
jurisdiction because DLM did not serve any party “according to” RICO’s
nationwide service of process provision. In Republic of Panama v. BCCI Holdings
(Luxembourg) S.A., we held that “[s]ection 1965(d) of the RICO statute provides
for service in any judicial district in which the defendant is found.” 3 119 F.3d 935,
942 (11th Cir. 1997). That section reads this way:
Cir. 2004) (the Eleventh Circuit has “repeatedly held that an issue not raised in the district court .
. . will not be considered by this court”; nor will an argument not briefed on appeal) (internal
quotation marks and citation omitted).
3
While we are bound by BCCI Holdings, we note that there is a dispute among the circuits as to
exactly which of § 1965’s subsections provides for nationwide service of process on RICO
defendants. The Fourth Circuit has joined us in identifying § 1965(d) as the relevant provision.
See ESAB Grp., Inc. v. Centricut, Inc., 126 F.3d 617, 626–27 (4th Cir. 1997). But a number of
circuits hold that § 1965(b), rather than § 1965(d), permits nationwide service of process over
RICO defendants. Laurel Gardens, LLC v. McKenna, 948 F.3d 105, 117 (3d Cir. 2020); FC Inv.
Grp. LC v. IFX Markets, Ltd., 529 F.3d 1087, 1098–1100 (D.C. Cir. 2008), overruled on other
grounds by Erwin-Simpson v. AirAsia Berhad, 985 F.3d 883 (D.C. Cir. 2021); Cory v. Aztec
Steel Bldg., Inc., 468 F.3d 1226, 1229 (10th Cir. 2006); PT United Can Co. v. Crown Cork &
Seal Co., 138 F.3d 65, 70–72 (2d Cir. 1998); Lisak v. Mercantile Bancorp, Inc., 834 F.2d 668,
671 (7th Cir. 1987); Butcher’s Union Loc. No. 498 v. SDC Inv., Inc., 788 F.2d 535, 539 (9th Cir.
1986).
In its entirety, § 1965 reads:
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(d) All other process in any action or proceeding under [RICO] may be
served on any person in any judicial district in which such person
resides, is found, has an agent, or transacts his affairs.
18 U.S.C. § 1965 (emphasis added). DLM did not serve any defendant in any
United States judicial district. To the extent it served the Individual Defendants
(the only ones named in the RICO counts) at all, it did so in London, England.
Section 1965(d)’s authorization of service in any judicial district plainly does not
authorize service outside the United States. See Cent. States, Se. & Sw. Areas
Pension Fund v. Reimer Express World Corp., 230 F.3d 934, 941 (7th Cir. 2000)
(“The RICO . . . service of process provision[] state[s] that service may be made in
(a) Any civil action or proceeding under this chapter against any person may be
instituted in the district court of the United States for any district in which such
person resides, is found, has an agent, or transacts his affairs.
(b) In any action under section 1964 of this chapter in any district court of the
United States in which it is shown that the ends of justice require that other parties
residing in any other district be brought before the court, the court may cause such
parties to be summoned, and process for that purpose may be served in any judicial
district of the United States by the marshal thereof.
(c) In any civil or criminal action or proceeding instituted by the United States
under this chapter in the district court of the United States for any judicial district,
subpenas issued by such court to compel the attendance of witnesses may be served
in any other judicial district, except that in any civil action or proceeding no such
subpena shall be issued for service upon any individual who resides in another
district at a place more than one hundred miles from the place at which such court
is held without approval given by a judge of such court upon a showing of good
cause.
(d) All other process in any action or proceeding under this chapter may be served
on any person in any judicial district in which such person resides, is found, has an
agent, or transacts his affairs.
18 U.S.C. § 1965. The choice between § 1965(d) and § 1965(b) does not matter in this case,
because both provisions require service within the United States. And DLM did not serve any
defendant in any judicial district of the United States.
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[‘any judicial district’], which indicates that Congress authorized service only in
the judicial districts of the United States and not worldwide. In comparison,
Congress authorized worldwide service in laws stating that service could be made
‘wherever the defendant may be found,’ or similar language, which is not limited
to the judicial districts of the United States.”). Thus, the nationwide service of
process provision in RICO cannot provide for personal jurisdiction in this case.
DLM attempted to serve the Individual Defendants in London, England, and
apparently canceled further efforts to serve them in response to defense counsel’s
agreement not to “contest[] service of process” in response to the initial complaint.
(Emphasis added). DLM suggests that this communication effectively waived the
defendants’ ability to contest personal jurisdiction, but it did no such thing.
Defense counsel’s email waived, at most, the ability to argue that DLM’s method
of serving the defendants -- leaving a bundle of documents for several defendants
at Fly Victor’s London reception desk -- was insufficient. It did not waive the
right to challenge personal jurisdiction. Personal jurisdiction and proper service
are distinct requirements and distinct objections. See Fed. R. Civ. P. 4(d)(5)
(“Waiving service of a summons does not waive any objection to personal
jurisdiction or to venue.”); Fed R. Civ. P. 12(b)(2), (5) (listing “lack of personal
jurisdiction” and “insufficient service of process” as distinct defenses); see also
Mann v. Castiel, 681 F.3d 368, 373 (D.C. Cir. 2012) (“Rule 4(d) contains a
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procedure for establishing waiver of service of a summons. . . . Waiving service of
a summons does not waive any objection to personal jurisdiction or to venue.”);
BSH Hausgeräte, GmbH v. Kamhi, 282 F. Supp. 3d 668, 676 (S.D.N.Y. 2017)
(“Respondent’s waiver of service and notice of appearance do not themselves
confer jurisdiction over Respondent.”).
Defense counsel’s representations about insufficient service did not relieve
DLM of its obligation to comply with the statutory prerequisites of the jurisdiction-
conferring provision on which it now relies; that is, it was required to serve the
Individual Defendants within the United States. Nothing obligated DLM to accept
the defendants’ invitation to cease its efforts to serve them, efforts DLM should
have known would be central to the RICO-based personal jurisdiction claim it
would bear the burden of proving. Nor did defense counsel’s waiver of the right to
contest the service method amount to an affirmative agreement to accept service in
the United States on the defendants’ behalf. Indeed, the only record
communication regarding acceptance of service is an email from defense counsel
(before the insufficient service waiver) informing DLM’s attorney that his firm
“ha[d] not been authorized to accept service on behalf of any Defendant.”
Moreover, when defense counsel agreed not to contest the service method, DLM
had not yet asserted personal jurisdiction based on RICO’s nationwide service of
process clause. We need not and do not decide whether a waiver of service of
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process could ever waive the right to contest personal jurisdiction under this clause
because the facts and circumstances of this case demonstrate that the defendants’
purported waiver was much more limited.
Even setting aside that no defendant was served in the United States,
§ 1965(d)’s remaining terms do not apply. None of the Individual Defendants
resides or has an agent in any United States judicial district. Nor do they “transact
[their] affairs” in any such district. DLM’s only claims on this score are that
Jackson is a director of, and Vorster is a director and officer of, an entity called
YoungJets LLC, a California LLC that is authorized to do business in Florida and
maintains a registered agent in Tallahassee. YoungJets changed its name to Fly
Victor Inc. -- not to be confused with defendant Fly Victor Ltd. -- in 2018. But
DLM does not make any allegations to support disregarding corporate separateness
between Jackson and Vorster and YoungJets. See United States ex rel. v. Mortg.
Invs. Corp., 987 F.3d 1340, 1356 (11th Cir. 2021) (imputing corporation’s contacts
to corporate executive for purposes of establishing personal jurisdiction over
executive only because the qui tam plaintiffs had sufficiently alleged that the
corporation’s veil should be pierced), cert. denied sub nom. Mortg. Invs. Corp. v.
United States ex rel. Bibby, No. 20-1463, ___ S. Ct. ___, 2021 WL 1951877 (May
17, 2021).
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Moreover, even if YoungJets’s business activity could somehow be imputed
to Jackson and Vorster, DLM does not allege any specific business activities
YoungJets undertook in any United States judicial district. A defendant “transacts
his affairs” in a district when he conducts substantial and continuous business
within the district. Cf. KM Enters., Inc. v. Glob. Traffic Techs., Inc., 725 F.3d
718, 728, 731 (7th Cir. 2013) (the similar phrase “transacts business” in the
Clayton Antitrust Act’s venue provision, 15 U.S.C. § 22, which served as a model
for RICO, refers to “the practical, everyday business or commercial concept of
doing business or carrying on business of any substantial character”) (quoting
United States v. Scophony Corp. of Am., 333 U.S. 795, 807 (1948)); see also
Corso v. Franz, No. 16CV2384FBSMG, 2018 WL 1513639, at *2 (E.D.N.Y. Mar.
27, 2018) (RICO’s “transacts his affairs” language “requires that the affairs
transacted in the district be substantial”); Jubilee House Cmty., Inc. v. Coker Int’l,
Inc., No. 1:11CV45, 2013 WL 1232900, at *6 (M.D.N.C. Mar. 26, 2013) (“A
defendant transacts his affairs in the district when he regularly transacts business of
a substantial and continuous character within the district.”) (internal quotation
marks and citation omitted); Magic Toyota, Inc. v. Se. Toyota Distribs., Inc., 784
F. Supp. 306, 319 (D.S.C. 1992) (“The term ‘transacts his affairs’ was drawn from
§ 12 of the Clayton Antitrust Act, 15 U.S.C. § 22, and has been interpreted to
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require that a defendant regularly transacts business of a substantial and continuous
character within the district.”).
Similarly, the course of dealing between Fly Victor Ltd. and DLM does not
establish that any Individual Defendant “transact[ed] his affairs” anywhere in the
United States: DLM says that YoungJets and other subsidiaries were alter egos of
Fly Victor Ltd., but does not allege that the corporate veil should be pierced
between the Individual Defendants and Fly Victor Ltd. See Mortg. Invs. Corp.,
987 F.3d at 1356. Fly Victor’s limited United States dealings with DLM do not so
much as even suggest that any of the Individual Defendants carried on a substantial
and continuous course of business in the United States.
The long and short of it is that DLM did not serve any defendant within the
United States. RICO’s nationwide (not worldwide) service of process provision
cannot provide the statutory basis for personal jurisdiction in this case. Therefore,
we need not reach the further questions that would necessarily have arisen had
DLM served the Individual Defendants in the United States -- namely whether
DLM’s RICO claims are sufficiently colorable to support reliance on RICO for
personal jurisdiction and whether the exercise of personal jurisdiction over the
defendants in the Southern District of Florida would offend due process. See
BCCI Holdings, 119 F.3d at 942.
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B.
We also affirm on the independent and alternative ground that the contract’s
forum selection clauses required dismissal.
As a preliminary note, it was procedurally improper for the defendants to
seek to enforce the forum selection clauses by means of a Rule 12(b)(3) motion to
dismiss for improper venue rather than by filing a motion to dismiss for forum non
conveniens. In Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. Dist. of Texas, the
Supreme Court clarified that “the appropriate way to enforce a forum-selection
clause pointing to a . . . foreign forum is through the doctrine of forum non
conveniens.” 571 U.S. 49, 60 (2013). The Court explained that Rule 12(b)(3)
provides for dismissal only when venue is “improper” under the applicable federal
venue statute, and that a forum selection clause cannot render venue improper
when the action meets the requirements of the relevant venue statute. Id.That said, the defendants’ error in asking for dismissal under Rule 12(b)(3),
rather than pursuant to forum non conveniens, does not require reversal. For one
thing, DLM has not complained about this non-jurisdictional error. DLM’s
arguments and the district court’s analysis both turned on the scope and
enforceability of the forum selection clauses. These same threshold issues would
have controlled even if the defendants and the district court had proceeded under
forum non conveniens. Cf. id. at 62 n.5 (presupposing, before explaining the
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analysis a court should undertake when analyzing a forum selection clause under
forum non conveniens, that there was a “contractually valid forum-selection
clause”). DLM has not argued or even remotely suggested that any public interest
forum non conveniens factors require non-enforcement of the forum selection
clauses. See id. at 64 (in the presence of a valid forum selection clause, “a district
court may consider arguments about public-interest factors only,” because the
clause represents the plaintiff’s agreement that the private interest factors cut in
favor of the contractually-selected forum). The defendants’ error in styling their
motion as arising under Rule 12(b)(3) did not affect the issues that control their
request for dismissal or the district court’s analysis, so the error did not prejudice
DLM in any way. This error was harmless. See Johnson v. NPAS Sols., LLC, 975
F.3d 1244, 1254–55 (11th Cir. 2020) (error in application of Federal Rules of Civil
Procedure was harmless because it did not deprive the complaining party of the
opportunity to present arguments that would have altered the outcome); Vista
Mktg., LLC v. Burkett, 812 F.3d 954, 978 (11th Cir. 2016); Stansell v.
Revolutionary Armed Forces of Colom., 771 F.3d 713, 746 (11th Cir. 2014).
What’s more, a successful forum non conveniens motion, like a Rule
12(b)(3) motion, results in dismissal. See Atl. Marine Const. Co., 571 U.S. at 60.
So it was not improper to seek to enforce the forum selection clauses by motion to
dismiss; it was simply improper to invoke Rule 12(b)(3) in doing so. Cf. Mueller
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v. Apple Leisure Corp., 880 F.3d 890, 894 (7th Cir. 2018) (“Although [the
defendant] had not formally moved to dismiss based on forum non conveniens, the
dismissal motion plainly invoked the forum-selection clause and asked the court to
enforce it. Accordingly, the judge was well within his discretion to treat the
motion as, in substance, a forum non conveniens motion.”). For its part, the
district court did not rely on any Rule 12(b)(3) or venue-specific reasoning to grant
the motion to dismiss; it simply held that the forum selection clauses were valid,
clear, enforceable, and applied to DLM’s case. “[B]ecause [DLM] pointed to no
public interest to justify setting aside the contractual choice of forum,” the district
court’s dismissal “was procedurally . . . correct.” See id. at 895.
Dismissal was substantively correct, as well. Again, the RSA contains two
clauses relevant to forum selection:
13. CHOICE OF LAW
13.1 This Agreement, and any issues or disputes arising out of or in
connection with it (whether such disputes are contractual or non-
contractual in nature, such as claims in tort, for breach of statute or
regulation or otherwise) shall be governed by and construed in
accordance with English law and the parties hereby submit to the
exclusive jurisdiction of the English Courts.
...
22. LAW AND JURISDICTION
...
22.2 The courts of England shall have exclusive jurisdiction to
adjudicate any dispute which arises out of or in connection with this
Participation Agreement, provided that Victor shall be entitled to take
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proceedings relating to this Participation Agreement in any other
jurisdiction.
These clauses unambiguously require an English forum. They are
mandatory, rather than permissive; they “dictate an exclusive forum for litigation
[related to] the contract.” Glob. Satellite Commc’n Co. v. Starmill U.K. Ltd., 378
F.3d 1269, 1272 (11th Cir. 2004) (internal quotation marks and citation omitted).
This much is clear from the repeated use of the modifier “exclusive” and from the
use of the verb “shall.” See Slater v. Energy Servs. Grp. Int’l, Inc., 634 F.3d 1326,
1330 (11th Cir. 2011) (“[T]he plain meaning of a contract’s language governs its
interpretation.”); compare Glob. Satellite, 378 F.3d at 1272 (relying on the use of
the “imperative” “shall” to conclude that a forum selection clause was mandatory)
with Citro Fla., Inc. v. Citrovale, S.A., 760 F.2d 1231, 1231–32 (11th Cir. 1985)
(forum selection clause that simply stated “Place of jurisdiction is Sao
Paulo/Brazil” was permissive). There can be no doubt that these are mandatory
forum selection provisions. They require that all disputes falling within their ambit
be litigated in England.
Nonetheless, DLM offers four arguments as to why the district court erred in
deciding that these clauses required dismissal: the forum selection clauses were the
product of fraud; they should not be enforced because they treat the parties
unevenly; their terms do not apply to this dispute; and dismissal in favor of an
English forum would be unreasonable and unjust. None is persuasive.
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Fraud. In this federal question case, federal law determines the
enforceability of the forum selection clauses. In re McGraw-Hill Glob. Educ.
Holdings LLC, 909 F.3d 48, 58 (3d Cir. 2018); All. Health Grp., LLC v. Bridging
Health Options, LLC, 553 F.3d 397, 399 (5th Cir. 2008); cf. Carnival Cruise Lines,
Inc. v. Shute, 499 U.S. 585, 590 (1991) (admiralty case). We review the
enforceability of a forum selection clause de novo. Rucker v. Oasis Legal Fin.,
L.L.C., 632 F.3d 1231, 1235 (11th Cir. 2011); Lipcon v. Underwriters at Lloyd’s,
London, 148 F.3d 1285, 1290–91 (11th Cir. 1998).
Under federal law, forum selection clauses “are presumptively valid and
enforceable unless the plaintiff makes a strong showing that enforcement would be
unfair or unreasonable under the circumstances.” Rucker, 632 F.3d at 1236(internal quotation marks and citation omitted). A plaintiff can defeat this
presumption by showing (1) that the clause “was induced by fraud or overreaching;
(2) the plaintiff would be deprived of its day in court because of inconvenience or
unfairness; (3) the chosen law would deprive the plaintiff of a remedy; or (4)
enforcement of the clause would contravene public policy.” Id. (citing M/S
Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972)). “[A] valid forum-selection
clause [should be] given controlling weight in all but the most exceptional cases.”
Atl. Marine, 571 U.S. at 63 (internal quotation marks and citation omitted).
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DLM has not made a “strong showing” that the forum selection clauses in
the RSA were the product of fraud. First, DLM’s reliance on the broader alleged
fraudulent scheme to deprive DLM of its rightful PrivateJet revenue share is a
nonstarter. The fraud exception “does not mean that any time a dispute arising out
of a transaction is based upon an allegation of fraud, as in this case, the clause is
unenforceable. Rather, it means that a[] . . . forum-selection clause in a contract is
not enforceable if the inclusion of that clause in the contract was the product of
fraud or coercion.” Scherk v. Alberto-Culver Co., 417 U.S. 506, 519 n.14 (1974).
To be sure, DLM does allege that Fly Victor included the forum selection clauses
themselves “with the underlying intent to defraud” DLM and to “weaponize the
choice of venue and choice of law provisions as a shield to protect their fraudulent
scheme and enterprise.” DLM also alleges that Fly Victor drafted the RSA and
that the forum selection clauses were “unnegotiated.” But DLM does not provide
plausible support for any of these conclusory allegations. See Lipcon, 148 F.3d at
1296 (finding allegations that a forum selection clause was the product of fraud
“insufficient to satisfy . . . [the] rigorous standard for pleading fraud” even though,
unlike here, the complaint identified specific alleged misleading statements about
the forum selection clause itself). In fact, DLM negotiated at least some provisions
of the RSA and does not identify any reason it could not have objected to the
forum selection clauses too. The parties exchanged (at least) a draft term sheet
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proposal and a redlined version of the draft RSA, the latter of which contained the
same forum selection clauses that appear in the final RSA. DLM asked for specific
provisions to be altered or included in the contract but, notably, did not object to
the forum selection clauses. Moreover, this negotiation was at arm’s length
between sophisticated corporate entities; DLM even hired a consultant to help it
negotiate the deal.
Reciprocity. DLM also relies on the Section 22.2 clause, which it claims is
somewhat inconsistent with the Section 13.1 clause in that Section 22.2 allows Fly
Victor, but not DLM, to take at least some proceedings in a non-English forum.
DLM says that this inconsistency renders the clauses ambiguous. But any
ambiguity regarding Fly Victor’s forum obligations is irrelevant to a suit brought
by DLM. As applied to DLM, both clauses harmoniously mandate an English
forum. DLM has not identified any cases suggesting that forum selection clauses
must provide reciprocal and equal benefits to contracting parties to be enforceable.
And we have found none. Indeed, we have found some authority to the contrary.
Danmar Lines, Ltd. v. CMA CGS S.A., No. 09-22857-CIV, 2010 WL 5174975, at
*3 (S.D. Fla. June 16, 2010) (“[F]orum selection clauses do not need to provide
reciprocal and equal benefits to contracting parties to be enforceable.”). That a
bargained-for provision may be more favorable to one party than another as to the
choice of forum does not make the contract ambiguous or suggest fraud.
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Scope. DLM next argues that the forum selection clauses do not apply to
this dispute. This, too, is unpersuasive. As we have seen, the forum selection
clauses are mandatory so far as they apply. DLM relies on Green Leaf Nursery v.
E.I. DuPont De Nemours & Co., 341 F.3d 1292, 1300–01 (11th Cir. 2003) to argue
that the clauses do not apply to its claims. But Green Leaf confronted a choice of
law clause that, by its terms, governed only the release of the claims component of
a broader settlement agreement: “this release shall be governed” by Delaware law,
read the clause. Id. at 1300 (alteration adopted). We held that the clause extended
only to the release, and not to tort claims or other disputes arising out of the
settlement agreement or the parties’ broader relationship. Id. at 1300–01. All
Green Leaf stands for is the unremarkable proposition that a choice of law clause
(and a forum selection clause) extends only so far as its terms allow.
Here, the forum selection clauses could hardly be broader; indeed, they are
far broader than the release-specific clause in Green Leaf. Section 13.1 extends to
“any issues or disputes arising out of or in connection with [the RSA] (whether
such disputes are contractual or non-contractual in nature, such as claims in tort,
for breach of statute or regulation or otherwise).” (Emphasis added). Section 22.1
likewise provides for exclusive English jurisdiction “to adjudicate any dispute
which arises out of or in connection with” the RSA. (Emphasis added). Any
issues or disputes in connection with the RSA means all issues or disputes in
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connection with the RSA “because ‘any’ means all.” Anders v. Hometown Mortg.
Servs., Inc., 346 F.3d 1024, 1028 (11th Cir. 2003) (internal quotation marks and
citation omitted).
The gravamen of DLM’s RICO claims (as well as its contract and other state
law claims) is that Fly Victor engaged in fraud by falsely promising, in the RSA,
that it would actively improve and maintain the PrivateJet site and share resulting
revenues with DLM. These claims fit squarely within the terms of the forum
selection clauses: they include both “contractual” and “non-contractual” claims,
including “for breach of statute,” all of which are plainly “in connection with” the
RSA. See Stewart Org., Inc. v. Ricoh Corp., 810 F.2d 1066, 1070 (11th Cir. 1987)
(en banc) (forum selection clause that provided for exclusive jurisdiction in
Manhattan over “any case or controversy arising under or in connection with [the]
Agreement” covered “all causes of action arising directly or indirectly from the
business relationship evidenced by the contract,” including claims for breach of
warranty, fraud, and antitrust violations), aff’d and remanded on other grounds,
487 U.S. 22, (1988).
Unreasonable/unjust. Finally, DLM suggests that enforcement of the forum
selection clauses would be unreasonable and unjust because it would require DLM
to litigate “a complex civil RICO fraud and money laundering matter before a
foreign court which would have little to no knowledge and experience hearing such
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a matter.” DLM also notes that England does not recognize civil RICO claims and
so does not provide “redress for the civil RICO conduct” DLM alleges. But “a
plaintiff’s inability to assert a RICO claim in the foreign forum does not preclude
forum non conveniens dismissal.” BCCI Holdings, 119 F.3d at 952. Nor does
DLM’s passing reference to English courts’ lack of familiarity with the governing
law come close to demonstrating that litigating this matter in an English forum will
“deprive[] it of its day in court.” Rucker, 632 F.3d at 1236 (citation omitted).
There is no reason to think the English courts will be unable to discern and fairly
apply the governing law, whatever it may be. See Riley v. Kingsley Underwriting
Agencies, Ltd., 969 F.2d 953, 958 (10th Cir. 1992) (“[O]ur courts have long
recognized that the courts of England are fair and neutral forums.”) (citing M/S
Bremen, 407 U.S. at 12).
All told, the forum selection clauses are enforceable, apply to DLM’s
claims, and mandate the dismissal of this case. So does DLM’s failure to establish
personal jurisdiction. Accordingly, we AFFIRM.
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