United States Securities & Exchange Commission v. Carrillo

115 F.3d 1540, 37 Fed. R. Serv. 3d 1118, 1997 U.S. App. LEXIS 16038, 1997 WL 322290
CourtCourt of Appeals for the Eleventh Circuit
DecidedJune 30, 1997
Docket96-4408
StatusPublished
Cited by111 cases

This text of 115 F.3d 1540 (United States Securities & Exchange Commission v. Carrillo) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Securities & Exchange Commission v. Carrillo, 115 F.3d 1540, 37 Fed. R. Serv. 3d 1118, 1997 U.S. App. LEXIS 16038, 1997 WL 322290 (11th Cir. 1997).

Opinion

BARKETT, Circuit Judge:

The United States Securities and Exchange Commission (“SEC”) appeals from the district court’s order dismissing its claims based on lack of personal jurisdiction with respect to defendants, a Costa Rican corporation and two of its officers. Because we find that the defendants had sufficient minimum contacts with the United States, and that exercising jurisdiction would not contravene traditional notions of fair play, we REVERSE.

I. BACKGROUND

Defendant Bosque Puerto Carrillo (“Bos-que”) is a Costa Rican corporation that owns and operates a teak tree plantation. Defendants Ralf Stefan Jaeekel and Terence James Ennis are, respectively, First and Second Vice Presidents of Bosque, and both are Costa Rican citizens domiciled in that country. On April 12, 1993, the SEC filed a complaint alleging that the defendants fraudulently offered and sold unregistered securities to United States residents to finance Bosque’s operations. 1 The SEC averred that Bosque, Jaeekel, and Ennis placed advertisements promoting these securities in American Way, the complimentary in-flight magazine of American Airlines, and Lacsa’s World, a similar publication of Costa Rica’s Lacsa Airlines. Defendants Jaeekel and En-nis also allegedly “arranged for two highly favorable articles about Bosque’s securities” to be written for publication in Lacsa’s World through telephone communication with a freelance author in Florida.

After hearing argument and reviewing relevant portions of the record, which included *1542 the complaint and depositions of Jaeckel and Ennis, the district court found that initial purchases of Bosque’s securities were made in Costa Rica. Defendants subsequently mailed information, including prospectuses, offering materials, and applications for further investments, to previously established investors. Payments for subsequent investments were made through accounts at the Miami branch of Banco Internacional de Cos-ta Rica, a Costa Rican bank.

II. DISCUSSION

We review the district court’s dismissal for lack of personal jurisdiction de novo. Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 626 (11th Cir.1996). Where, as here, the district court has exercised its discretion not to hold an evidentiary hearing, the standard by which to decide the issue of personal jurisdiction is clear:

[T]he plaintiff must establish a prima facie case of personal jurisdiction over a nonresident defendant. A prima facie ease is established if the plaintiff presents enough evidence to withstand a motion for directed verdict. The district court must accept the facts alleged in the complaint as true, to the extent they are uncontroverted by the defendant’s affidavits. Finally, where the plaintiffs complaint and the defendant’s affidavits [or depositions] conflict, the district court must construe all reasonable inferences in favor of the plaintiff.

Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir.1990) (citations omitted); see also Morris v. SSE, Inc., 843 F.2d 489, 492 (11th Cir.1988).

It is well established that “[t]he due process clause ... constrains a federal court’s power to acquire personal jurisdiction” over a nonresident defendant. In re Chase & Sanborn Corp., 835 F.2d 1341, 1344 (11th Cir.1988), rev’d on other grounds sub nom. Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 109 S.Ct. 2782, 106 L.Ed.2d 26 (1989). The exercise of personal jurisdiction comports with due process when “(1) the nonresident defendant has purposefully established minimum contacts with the forum ... and (2) the exercise of jurisdiction will not offend traditional notions of fair play and substantial justice.” Francosteel Corp. v. M/V Charm, 19 F.3d 624, 627 (11th Cir.1994); accord Vermeulen v. Renault, U.S.A., Inc., 985 F.2d 1534, 1545 (11th Cir.1993). The district court deemed it unnecessary to address the second prong of this inquiry, finding that the Costa Rican defendants did not have sufficient minimum contacts with the relevant forum.

To constitute minimum contacts for purposes of specific jurisdiction, 2

the defendant’s contacts with the applicable forum must satisfy three criteria. First, the contacts must be related to the plaintiffs cause of action or have given rise to it. Second, the contacts must involve some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum ..., thus invoking the benefits and protections of its laws. Third, the defendant’s contacts with the forum must be such that [the defendant] should reasonably anticipate being haled into court there.

Vermeulen, 985 F.2d at 1546 (citations and quotation marks omitted).

In this case, the district court indicated that the applicable forum was the State of Florida. See R2-99-3. Appellees suggest that we have not yet specifically set forth a rule for identifying the relevant forum — the United States or the State where the district court sits — for purposes of minimum contacts analysis in a nondiversity action involving an alien defendant. 3 See Brief of Corporate Ap- *1543 pellee at 21 (citing Chase & Sanborn, 835 F.2d at 1345 n. 10 (declining to address the issue of which forum was proper)). However, a survey of our precedents reveals that we generally have deemed the applicable forum for minimum contacts purposes to be the United States in eases where, as here, service of process has been effected pursuant to a federal statute authorizing nationwide or worldwide service, although we have never explicitly stated a rule to that effect. See, e.g., Vermeulen, 985 F.2d at 1545 (suit involving alien defendant under Foreign Sovereign Immunities Act).

Other circuits have uniformly held that “[w]hen the personal jurisdiction of a federal court is invoked based upon a federal statute providing for nationwide or worldwide service, the relevant inquiry is whether the respondent has had sufficient minimum contacts with the United States.” In re Application to Enforce Admin. of Subpoenas of S.E.C. v. Knowles, 87 F.3d 413, 417 (10th Cir.1996) (Securities Exchange Act); accord Busch v. Buchman, Buchman & O’Brien, 11 F.3d 1255, 1258 (5th Cir.1994) (Securities Exchange Act); United Liberty Life Ins. Co. v. Ryan, 985 F.2d 1320, 1330 (6th Cir.1993) (Securities Exchange Act); United Elec. Workers v.

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Bluebook (online)
115 F.3d 1540, 37 Fed. R. Serv. 3d 1118, 1997 U.S. App. LEXIS 16038, 1997 WL 322290, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-securities-exchange-commission-v-carrillo-ca11-1997.