Trading Secrets

"Internet Communications" Alone Insufficient To Invoke Florida Long-Arm Statute Against Lindsay Lohan In Trade Secrets Misappropriation Suit

White Wave International, Inc. filed an action in Florida against Lindsay Lohan, Lorit LLC, a company she has an indirect ownership interest in, and several other defendants arising out of a certain Confidentiality Agreement Between Firms (“CABF”) between White Wave and Lorit. It was alleged by White Wave that the CABF provided Lohan, Lorit and the other defendants with a time-limited opportunity to examine and obtain samples of White Wave’s product. It was further alleged that although Lorit made an offer to purchase the product from White Wave, the parties were unable to agree on a purchase price and the relationship was terminated. White Wave’s action arose, it alleged, when Lorit, Lohan and another defendant introduced a product which was claimed to contain the nearly identical ingredients as White Wave’s product.

White Wave’s complaint included five counts including breach of contract, theft of trade secrets (under the Uniform Trade Secrets Act), civil conspiracy, intentional interference with contract and deceptive and unfair trade practices. Lohan moved to dismiss the complaint as against her on the basis of lack of personal jurisdiction (notably, the action had been dismissed as against 3 other defendants previously on similar grounds).

Lohan argued that the court lacked personal jurisdiction over her because she did not have sufficient contacts with the State of Florida with respect to the facts that gave rise to the complaint, specifically regarding the CABF, Lorit or its business. White Wave argued that Lohan communicate with Florida citizens “through the internet” regarding Lorit’s product, and that consequently her physical presence in Florida was not necessary to confer jurisdiction.  Essentially, that her “telephonic, electronic, or written communications into Florida” regarding Lorit’s product were enough to invoke long-arm jurisdiction.

The court dismissed the action as against Lohan, finding that none of the activity prescribed to her by White Wave satisfied Florida's long-arm statute (subparagraphs (1)(a) through (h) of § 48.193 of the Florida Statutes).  Although the court agreed that “… a defendant does not have to be physically present in the state to commit a tort under § 48.193(1)(b)” and further that “[t]he Eleventh Circuit has consistently applied [a] broader construction of section (1)(b)”,  it further held that the cases in which the Eleventh Circuit has applied section (1)(b) to foreign torts causing injury within Florida, the conduct was directed at Florida residents, corporations, or property, and the harm was felt exclusively or primarily in Florida.  Because the alleged tortious act was the misappropriation of White Wave’s trade secrets, a misappropriation alleged to have occurred outside the State, the alleged tortious act was not directed at Florida residents, corporations or property and thus could not be used to invoke the long-arm statute.

As to the allegation that Lohan committed a tortious act within Florida “by making telephonic, electronic, or written communications” into the State, to wit her “internet communications” promoting Lorit’s product, the court found that the cause of action alleged, misappropriation of trade secrets, did not arise from said internet communications. Consequently the court ruled that the “tortious conduct” occurred outside of the state, and the damage alleged were insufficient to satisfy Florida's long-arm statute.

The court similarly rejected plaintiff’s argument that its civil conspiracy claim satisfied the long-arm statute.  White Wave argued that the long-arm statute conferred personal jurisdiction over an alleged conspirator where any other co-conspirator committed an act in Florida in furtherance of the conspiracy. The court found that the complaint failed to allege sufficient facts from which it could be reasonably inferred that the defendants, including Lohan, “…were part of a conspiracy either engineered in Florida or pursuant to which a tortious act in furtherance was committed in Florida.”

The court also rejected the argument that personal jurisdiction over Lohan could be established by the breach of contract provision of the Florida long-arm statute because the CABF was between White Wave and Lorit, and Lohan was only, at best under the facts alleged in the complaint, a member of the limited liability corporation. Consequently, the court found that she could not be personally liable for any liability of the limited liability corporation under the facts alleged, and therefore, jurisdiction under under the Florida long-arm statute failed there as well. As a result, the court did not reach Lohan’s due process arguments.

White Wave may decide to pursue its suit against Lohan in another forum where she is subject to personal jurisdiction, such as California.

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