Spigot, Inc. v. Hoggatt

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

FORT MYERS DIVISION

SPIGOT, INC., POLARITY

TECHNOLOGIES LTD., and

EIGHTPOINT TECHNOLOGIES

LTD.,

Plaintiffs,

v. Case No: 2:18-cv-764-FtM-29NPM

JEREMY MATTHEW HOGGATT and

MEDIAVO, INC.,

Defendants.

OPINION AND ORDER

This matter comes before the Court on defendants’ Motion to

Dismiss For Lack of Personal Jurisdiction, For Improper Venue and,

Alternatively, for Failure to State a Claim Upon Which Relief Can

Be Granted (Doc. #89), filed on January 31, 2020, following a

period of jurisdictional discovery. Plaintiffs filed an

Opposition (Doc. #90) on February 14, 2020.

On January 17, 2020, plaintiffs filed the First Amended

Complaint (Doc. #88), which asserts two claims: (1) violation of

the Florida Uniform Trade Secrets Act (“FUTSA”), §§ 688.001-.009,

Fla. Stat. (Count One); and (2) violation of the Defend Trade

Secrets Act (“DTSA”), 18 U.S.C. § 1836 (Count Two). Defendants

argue that dismissal is proper because (1) the Court lacks personal

jurisdiction over either defendant, (2) venue is improper in

Florida, and (3) plaintiffs fail to state a claim against either

defendant. (Doc. #89, pp. 13-22.) Plaintiffs respond that each

1

of these arguments is without merit. (Doc. #90, pp. 17-20.) For

the reasons set forth below, with one exception the motion is

denied.

I.

According to the First Amended Complaint (Doc. #88):

Plaintiff Spigot, Inc. (Spigot) is a Nevada corporation with

its principal office located in Fort Myers, Florida; plaintiff

Polarity Technologies Ltd. is a Cyprus company with its principal

place of business in Cyprus; and plaintiff Eightpoint Technologies

Ltd. is a Cayman Islands company with its principal place of

business in the Cayman Islands (Id. ¶¶ 1-3) (collectively

plaintiffs.) Defendant Mediavo, Inc. (Mediavo) is a Delaware

corporation with its principal place of business in Kansas City,

Missouri, and defendant Jeremy Hoggatt (Hoggatt) is a resident of

Missouri and the founder and Chief Executive Officer of Mediavo

(Id. ¶¶ 4-5) (collectively defendants.)

This action arises from trade secrets and business strategies

developed by a non-party formerly known as Adknowledge, Inc.

(Adknowledge) and purchased by plaintiffs in September, 2016. (Id.

1

The cited page numbers in the motion and response refer to

the Court’s computer-generated page number at the top of the

document, not the page number on the bottom of the document.

p. 1.) Adknowledge was formed in 2002 and has become one of the

world’s largest privately held digital advertising networks and

software development companies. (Id. ¶ 13.) Adknowledge operated

various interconnected Business Channels (business units) through

which proprietary information was shared. (Id.) Two of the

Business Channels are relevant to this case: the Apps Channel,

which focused on creating, designing, and developing proprietary

software and web browser applications and extensions for desktop

computers and mobile phones; and the Email Channel, which focused

on monetizing emails and email list management. (Id. ¶¶ 13-17.)

Adknowledge’s Apps Channel developed certain trade secrets,

including a Life Time Value (“LTV”) model, an LTV power curve, an

LTV multiplier, proprietary desktop extension products,

confidential business strategies, confidential advertising and

marketing strategies, and confidential affiliate business methods.

(Id. p. 2, ¶¶ 21-29.) Using these trade secrets, Adknowledge

monetized nontraditional segments and verticals and developed a

niche customer list of affiliates and publishers. (Id. ¶¶ 30,

31.) Adknowledge took great measures to protect these trade

secrets from disclosure, including confidentiality and non-

disclosure agreements, internal guidelines, and unique user names

and passwords. (Id. ¶ 33.)

Hoggatt joined Adknowledge as Director of Engineering in

2009, was promoted to Vice President in February, 2011, and was

again promoted in November, 2011 to General Manager in charge of

the Email Channel. (Id. ¶¶ 18-20, 42.) Hoggatt was privy to and

accessed the Adknowledge trade secrets by virtue of the receipt of

certain types of emails and attendance at certain types of

meetings. (Id. p. 2, ¶¶ 43-45, 49-50.)

On September 21, 2016, plaintiffs executed an Asset Purchase

Agreement in which they purchased certain assets from Adknowledge

and its subsidiary, including the Apps Channel Trade Secrets. (Id.

p. 2, ¶¶ 32, 35-37.) Included in the Asset Purchase Agreement was

a non-competition clause which precluded use of the trade secrets

being acquired by plaintiffs. (Id. ¶¶ 39-40.) After the purchase,

all of the Apps Channel Adknowledge employees left Adknowledge and

joined Spigot, continuing to work on the purchased assets. (Id.

¶ 38.) Hoggatt was bound by the non-compete provision, but did

not join Spigot as an employee. (Id. ¶ 38, 41.)

In October, 2017, Hoggatt left Adknowledge to form Mediavo,

a digital marketing company that directly competes with plaintiffs

by distributing desktop extensions to internet users. (Id. ¶¶ 42,

51, 54.) Prior to leaving Adknowledge, Hoggatt is alleged to have

“aggregated” and “improperly collected” the trade secrets,

confidential strategies and customer lists at issue, and now he

and Mediavo are using these items to the detriment of plaintiffs.

(Id. ¶¶ 60-66, 73, 80-83, 92-94.)

II.

Typically, the Court would address the personal jurisdiction

issue first, since “[a] court without personal jurisdiction is

powerless to take further action.” Posner v. Essex Ins. Co., Ltd.,

178 F.3d 1209, 1214 n.6 (11th Cir. 1999). Plaintiffs, however,

have asserted personal jurisdiction over defendants based in part

on operating a business in Florida and on “tortious acts”

defendants allegedly committed within Florida. (Doc. #88, ¶¶ 6-

7.) A determination that the First Amended Complaint fails to

state a claim, as defendants argue, would affect personal

jurisdiction. PVC Windoors, Inc. v. Babbitbay Beach Constr., N.V.,

598 F.3d 802, 808 (11th Cir. 2010) (“In Florida, before a court

addresses the question of whether specific jurisdiction exists

under the long-arm statute, the court must determine ‘whether the

allegations of the complaint state a cause of action.’” (quoting

Wendt v. Horowitz, 822 So. 2d 1252, 1260 (Fla. 2002)). The Court

therefore begins with defendants’ Rule 12(b)(6) argument.

A. Motion to Dismiss Legal Standards

Under Federal Rule of Civil Procedure 8(a)(2), a Complaint

must contain a “short and plain statement of the claim showing

that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2).

This obligation “requires more than labels and conclusions, and a

formulaic recitation of the elements of a cause of action will not

do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)

(citation omitted). To survive dismissal, the factual allegations

must be “plausible” and “must be enough to raise a right to relief

above the speculative level.” Id. at 555l; see also Edwards v.

Prime Inc., 602 F.3d 1276, 1291 (11th Cir. 2010). This requires

“more than an unadorned, the-defendant-unlawfully-harmed-me

accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

(citations omitted).

In deciding a Rule 12(b)(6) motion to dismiss, the Court must

accept all factual allegations in a complaint as true and take

them in the light most favorable to plaintiff, Erickson v. Pardus,

551 U.S. 89 (2007), but “[l]egal conclusions without adequate

factual support are entitled to no assumption of truth,” Mamani v.

Berzain, 654 F.3d 1148, 1153 (11th Cir. 2011) (citations omitted).

“Threadbare recitals of the elements of a cause of action,

supported by mere conclusory statements, do not suffice.” Iqbal,

556 U.S. at 678. “Factual allegations that are merely consistent

with a defendant’s liability fall short of being facially

plausible.” Chaparro v. Carnival Corp., 693 F.3d 1333, 1337 (11th

Cir. 2012) (citations omitted). On the other hand, “[a] claim has

facial plausibility when the plaintiff pleads factual content that

allows the court to draw the reasonable inference that the

defendant is liable for the misconduct alleged.” Iqbal, 556 U.S.

at 678. Thus, the Court engages in a two-step approach: “When

there are well-pleaded factual allegations, a court should assume

their veracity and then determine whether they plausibly give rise

to an entitlement to relief.” Id. at 679.

B. Elements of Florida and Federal Trade Secret Statutes

Count One of the First Amended Complaint alleges defendants

violated the Florida Uniform Trade Secrets Act (“FUTSA”), §§

688.001-.009, Fla. Stat. Generally, the FUTSA provides that “a

complainant is entitled to recover damages for misappropriation”

of a trade secret. § 688.004(1), Fla. Stat. “Misappropriation”

is defined by the FUTSA as certain acquisitions, disclosures, or

uses of a trade secret:

“Misappropriation” means:

(a) Acquisition of a trade secret of another

by a person who knows or has reason to know

that the trade secret was acquired by improper

means; or

(b) Disclosure or use of a trade secret of

another without express or implied consent by

a person who:

1. Used improper means to acquire knowledge of

the trade secret; or

2. At the time of disclosure or use, knew or

had reason to know that her or his knowledge

of the trade secret was:

a. Derived from or through a person who had

utilized improper means to acquire it;

b. Acquired under circumstances giving rise to

a duty to maintain its secrecy or limit its

use; or

c. Derived from or through a person who owed

a duty to the person seeking relief to

maintain its secrecy or limit its use; or

3. Before a material change of her or his

position, knew or had reason to know that it

was a trade secret and that knowledge of it

had been acquired by accident or mistake.

§ 688.002(2), Fla. Stat. “[I]mproper means” is defined by the

FUTSA as:

“Improper means” includes theft, bribery,

misrepresentation, breach or inducement of a

breach of a duty to maintain secrecy, or

espionage through electronic or other means.

Id. § 688.002(1). Finally, “[t]rade secret” is defined in the

FUTSA as certain types of information:

“Trade secret” means information, including a

formula, pattern, compilation, program,

device, method, technique, or process that:

(a) Derives independent economic value, actual

or potential, from not being generally known

to, and not being readily ascertainable by

proper means by, other persons who can obtain

economic value from its disclosure or use; and

(b) Is the subject of efforts that are

reasonable under the circumstances to maintain

its secrecy.

Id. § 688.002(4).

Count Two of the First Amended Complaint alleges defendants

violated the Defend Trade Secrets Act (“DTSA”), which became

effective May 11, 2016. 18 U.S.C. § 1836. Under the DTSA, “[a]n

owner of a trade secret that is misappropriated may bring a civil

action under this subsection if the trade secret is related to a

product or service used in, or intended for use in, interstate or

foreign commerce.” Id. § 1836(b)(1). A “trade secret” is defined

by the DTSA as:

[T]he term “trade secret” means all forms and

types of financial, business, scientific,

technical, economic, or engineering

information, including patterns, plans,

compilations, program devices, formulas,

designs, prototypes, methods, techniques,

processes, procedures, programs, or codes,

whether tangible or intangible, and whether or

how stored, compiled, or memorialized

physically, electronically, graphically,

photographically, or in writing if—

(A) the owner thereof has taken reasonable

measures to keep such information secret; and

(B) the information derives independent

economic value, actual or potential, from not

being generally known to, and not being

readily ascertainable through proper means by,

another person who can obtain economic value

from the disclosure or use of the information;

. . . .

18 U.S.C. § 1839(3). “Misappropriation” is defined as:

[T]he term “misappropriation” means-- (A)

acquisition of a trade secret of another by a

person who knows or has reason to know that

the trade secret was acquired by improper

means; or (B) disclosure or use of a trade

secret of another without express or implied

consent by a person who-- (i) used improper

means to acquire knowledge of the trade

secret; (ii) at the time of disclosure or use,

knew or had reason to know that the knowledge

of the trade secret was--(I) derived from or

through a person who had used improper means

to acquire the trade secret; (II) acquired

under circumstances giving rise to a duty to

maintain the secrecy of the trade secret or

limit the use of the trade secret; or (III)

derived from or through a person who owed a

duty to the person seeking relief to maintain

the secrecy of the trade secret or limit the

use of the trade secret; or (iii) before a

material change of the position of the person,

knew or had reason to know that-- (I) the trade

secret was a trade secret; and (II) knowledge

of the trade secret had been acquired by

accident or mistake; . . . .

Id. § 1839(5). Finally, “improper means” is defined by the DTSA

as

[T]he term ‘improper means’-- (A) includes

theft, bribery, misrepresentation, breach or

inducement of a breach of a duty to maintain

secrecy, or espionage through electronic or

other means; and (B) does not include reverse

engineering, independent derivation, or any

other lawful means of acquisition; . . . .

Id. § 1839(6).

C. Defendants’ Arguments for Dismissal

Defendants argue that (1) Count Two should be dismissed to

the extent any misappropriation is alleged to have occurred prior

to May 11, 2016, the effective date of the DTSA; (2) the

information at issue is not a “trade secret” within the meanings

of either the federal or Florida statute; and (3) the First Amended

Complaint alleges only access to trade secrets, as opposed to

wrongful acquisition of trade secrets. (Doc. #89, pp. 18-22.)

The Court addresses each in turn.

(1) Conduct Pre-Dating DTSA

The DTSA was enacted on May 11, 2016, and applies to “any

misappropriation of a trade secret . . . for which any act occurs

on or after the date of the enactment.” Defend Trade Secrets Act

of 2016, Pub. L. No. 114-153, § 2(e), 130 Stat. 376, 381-83 (2016).

Defendants argue that:

[t]he Complaint depends on allegations that Defendant

Hoggatt acquired the Subject Information during two

meetings that took place in Florida. The first of those

meetings took place in October 2015. The second occurred

in April 2016. If Hoggatt indeed acquired Subject

Information during these meetings, he did so prior to

enactment of the DTSA. So the DTSA does not apply to his

alleged acquisition.

(Doc. #89, p. 19 (citations omitted)).

Defendants rely on Hoggatt’s deposition testimony to establish

the two Florida meetings, (Doc. #89, p. 19; Doc. #89-3, pp. 41,

43), but consideration of such evidence is beyond the proper scope

of a Rule 12(b)(6) motion. Instead, defendants may only rely upon

the allegations in the First Amended Complaint. “A court’s review

on a motion to dismiss is ‘limited to the four corners of the

complaint.’” Wilchombe v. TeeVee Toons, Inc., 555 F.3d 949, 959

(11th Cir. 2009) (citation omitted)); see also Stanley v. Life

Ins. Co. of N. Am., 426 F. Supp. 2d 1275, 1278 (M.D. Fla. 2006)

(“If a party wants to assert arguments and issues that are not

within the four corners of the complaint, then that party may file

a Motion for Summary Judgment.”). The allegations in the First

Amended Complaint do not mention, and are not limited to, the two

meetings relied upon by defendants in their motion to dismiss.

It is clear, however, that plaintiffs cannot have a cause of

action under the DTSA for conduct occurring before its effective

date (May 11, 2016). This is so both because there was no such

federal cause of action before that date, and because plaintiffs

had no interest in the trade secrets, and therefore no standing to

assert a cause of action, until the September 21, 2016 Asset

Purchase Agreement.

The Supreme Court has established that the “irreducible

constitutional minimum” of standing consists of three elements:

the plaintiff must have (1) suffered an injury in fact, (2) that

is fairly traceable to the challenged conduct of the defendant,

and (3) that is likely to be redressed by a favorable judicial

decision. Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016)

(citations omitted). Plaintiffs, as the parties invoking federal

jurisdiction, bear the burden of establishing these elements, and

at the pleading stage, plaintiffs must “clearly . . . allege facts

demonstrating” each element. Id. (citations omitted). “To

establish injury in fact, a plaintiff must show that he or she

suffered ‘an invasion of a legally protected interest’ that is

‘concrete and particularized’ and ‘actual or imminent, not

conjectural or hypothetical.’” Id. at 1548 (citation omitted.)

It is undisputed in this case that plaintiffs had no interest in

the trade secrets developed by Adknowledge until the Asset Purchase

Agreement was signed on September 21, 2016.

The Court does not read Count Two as asserting DTSA

misappropriation based on misconduct occurring before September

21, 2016, or before the May 11, 2016 enactment of the DTSA, even

though Hoggatt is alleged to have had access to the trade secrets

before those dates. Plaintiffs, however, seem to argue to the

contrary, asserting that “to the extent Defendants engaged in

wrongful acts prior to the enactment of DTSA, Plaintiffs may still

recover under the statute as misappropriation post-dates DTSA.”

2

(Doc. #90, p. 21.) This is incorrect. Plaintiffs may state a

cause of action only for an acquisition, disclosure, or use which

occurs after May 11, 2016, although evidence of acts before that

date may be relevant. See Fin. Info. Techs., Inc. v. iControl

Sys., USA, LLC, 2018 WL 3391379, *4 (M.D. Fla. June 12, 2018)

(“Even if a trade secret was acquired or developed prior to May

11, 2016, a plaintiff may recover where disclosure to the public

occurred after that date.”). However, here plaintiffs’ earliest

date for a cause of action is September 21, 2016, when they are

alleged to have acquired an interest in the trade secrets.

Plaintiffs state in their Opposition to the motion that the

misappropriation in this case is defendants use of their purchased

proprietary information to create a competing business (Doc. #90,

pp. 17-18), and cite the allegation in the First Amended Complaint

that Hoggatt “wrongfully used such information to directly compete

2

This apparently only refers to Hoggatt, since Mediavo did

not exist until October 19, 2017.

with Plaintiffs by forming Mediavo and using the Trade Secrets to

target specific users and verticals.” (Id. p. 18, quoting Doc.

#88, ¶ 81.) As plaintiffs further stated, Hoggatt left Adknowledge

in October, 2017, “and on that date he unlawfully absconded with

Plaintiffs’ Trade Secrets, thereafter forming Mediavo to use

unlawfully use [sic] and deploy the trade secrets.” (Doc. #90,

pp. 20-21.) In multiple places the First Amended Complaint alleges

Hoggatt “aggregated” the trade secrets, quit employment at

Adknowledge, and then used the trade secrets in furtherance of the

new business. (Doc. #88, p. 2, ¶¶ 9, 42, 48, 58-59, 61, 66, 69-

71, 93-94.) Mediavo was formed on October 19, 2017. (Doc. #90-

10, p. 73.)

Viewing the allegations in the First Amended Complaint in the

light most favorable to plaintiffs, the Court finds that Count Two

sufficiently alleges misappropriations that occurred after the

enactment of the DTSA and after plaintiffs acquired an interest in

the trade secrets. To the extent plaintiffs believe the First

Amended Complaint alleges a cause of action based on defendants’

conduct occurring prior to September 21, 2016, such portions of

Count Two are dismissed without prejudice.

(2) “Trade Secret”

Defendants argue that the subject information is not a “trade

secret” because other than the LTV model, “none of this information

is secret” and “Plaintiffs made no effort to keep this information

secret.” (Doc. #89, p. 20.) Plaintiffs respond that the First

Amended Complaint sufficiently alleges both that the information

is secret and that they made reasonable efforts to keep it secret.

(Doc. #90, pp. 18-20.)

Generally, both the federal and Florida statutes limit “trade

secrets” to information that is “secret” in the sense that it is

not generally known and cannot be readily ascertained by proper

3

means. Additionally, both statutes require that reasonable

4

efforts or measures be taken to keep the information secret.

3

Under the FUTSA, “trade secret” means information, that

“[d]erives independent economic value, actual or potential, from

not being generally known to, and not being readily ascertainable

by proper means by, other persons who can obtain economic value

from its disclosure or use.” § 688.002(4)(a), Fla. Stat.

Similarly, under the DTSA a “trade secret” means “all forms

and types of financial, business, scientific, technical, economic,

or engineering information, . . . if . . . (B) the information

derives independent economic value, actual or potential, from not

being generally known to, and not being readily ascertainable

through proper means by, another person who can obtain economic

value from the disclosure or use of the information.” 18 U.S.C.

§ 1839(3).

4

Under the FUTSA, to be a trade secret the information must

also be “the subject of efforts that are reasonable under the

circumstances to maintain its secrecy.” § 688.002(4)(b), Fla.

Stat.

Similarly, under the DTSA a “trade secret” means “all forms

and types of financial, business, scientific, technical, economic,

or engineering information, . . . if--(A) the owner thereof has

taken reasonable measures to keep such information secret.” 18

U.S.C. § 1839(3).

Failure to sufficiently plead either element would require

dismissal of the cause of action.

The allegations in the First Amended Complaint sufficiently

alleged that the information asserted to be “trade secrets” was

not generally known and cannot be readily ascertained by proper

means. See (Doc. #88, p. 2, ¶¶ 21-33.) While defendants dispute

the accuracy of these allegations, these factual disputes are for

another day. “Whether information constitutes a ‘trade secret’ is

a question of fact,” Penalty Kick Mgmt. Ltd. v. Coca Cola Co., 318

F.3d 1284, 1291 (11th Cir. 2003), and “a motion to dismiss is not

the vehicle to resolve questions of fact,” Becker v. City of Fort

Myers, 2019 WL 2929326, *2 n.4 (M.D. Fla. July 8, 2019).

Additionally, the First Amended Complaint sufficiently alleges

that plaintiffs, as well as Adknowledge, took reasonable steps to

protect the information. The First Amended Complaint alleges that:

•

When Adknowledge developed the trade secrets, it “took great

measures to protect” them by (1) requiring all employees to

sign confidentiality and nondisclosure agreements, (2)

developing guidelines and policies to prevent the

dissemination of the trade secrets outside of Adknowledge,

and (3) requiring unique user names and passwords to access

the information.

•

As part of the Asset Purchase Agreement for the trade secrets,

all the Apps Channel employees left Adknowledge to join Spigot

and continue working on the purchased assets.

•

Being aware the trade secrets were “extremely valuable,”

plaintiffs insisted the Asset Purchase Agreement contain a

non-compete clause with Adknowledge to protect plaintiffs’

investment and “prevent seller restricted parties from using”

the trade secrets.

(Doc. #88, ¶¶ 33, 38-40.) Additionally, plaintiffs specifically

allege that they took all reasonable steps to protect the trade

secrets from public disclosure, including non-disclosure

agreements and password protection. (Id. ¶¶ 76, 88.) Again, while

defendants disagree with the accuracy of these allegations,

resolution of such disputes is not appropriate at the motion to

dismiss stage. Treco Int’l S.A. v. Kromka, 706 F. Supp. 2d 1283,

1287 (S.D. Fla. 2010) (“[W]hether a party has taken reasonable

steps under the circumstances to preserve its trade secrets is a

factual inquiry that cannot be resolved on a motion to dismiss.”)

Viewing the allegations in plaintiffs’ favor, the Court finds

the First Amended Complaint sufficiently alleges the information

was secret and that reasonable efforts or measures were taken to

protect the information.

(3) “Wrongfully Acquired”

Finally, defendants argue plaintiffs fail to state claims for

misappropriation because the First Amended Complaint does not

allege the trade secrets were wrongfully acquired. (Doc. #89, p.

21.) The Court disagrees.

Under both the federal and Florida statutes,

“misappropriation” is defined to include “acquisition of a trade

secret of another by a person who knows or has reason to know that

the trade secret was acquired by improper means.” 18 U.S.C §

1839(5)(A); § 688.002(2)(a), Fla. Stat. Both statutes define

“improper means” to include theft and breach of a duty to maintain

secrecy. 18 U.S.C § 1839(6)(A); § 688.002(1), Fla. Stat.

Here, the First Amended Complaint alleges Hoggatt “aggregated”

and then took the trade secrets after plaintiffs had purchased

them, and used the trade secrets at Mediavo to directly compete

with plaintiffs. While defendants are correct that the First

Amended Complaint does not specifically use the word “theft” (Doc.

#89, p. 21), the reasonable inference is clear. Iqbal, 556 U.S.

at 678. The Court finds these allegations of misappropriation are

sufficient.

Additionally, the First Amended Complaint alleges that Hoggatt

was bound by the non-disclosure clause in the Asset Purchase

Agreement (Doc. #88, ¶ 41), which created a duty which was

allegedly breached. Both the federal and Florida statutes define

“misappropriation” to include certain disclosures or uses of a

trade secret by a qualifying person. To be liable for such

disclosure or use of a trade secret, the putative defendant must:



Have “[u]sed improper means to acquire knowledge of the trade

secret;” or



“At the time of disclosure or use, knew or had reason to know

that her or his knowledge of the trade secret was:

•

a. Derived from or through a person who had utilized

improper means to acquire it;

•

b. Acquired under circumstances giving rise to a duty to

maintain its secrecy or limit its use; or

•

c. Derived from or through a person who owed a duty to

the person seeking relief to maintain its secrecy or

limit its use;” or



“Before a material change of her or his position, knew or had

reason to know that it was a trade secret and that knowledge

of it had been acquired by accident or mistake.”

§ 688.002(2), Fla. Stat. The DTSA contains a similar provision.

18 U.S.C. § 1839(5). The First Amended Complaint sufficiently

alleges defendants were such qualifying persons. E.g., (Doc. #88,

¶¶ 42-49, 60-61, 80-82, 92-94.)

Accordingly, the Court finds that the First Amended Complaint

plausibly sets forth claims for violation of the FUTSA and the

DTSA. To the extent plaintiffs believe the First Amended Complaint

alleges a cause of action based in part on conduct occurring prior

to September 21, 2016, such portions of the claim are dismissed

without prejudice. The Rule 12(b)(6) motion to dismiss is

otherwise denied.

III.

Having found the First Amended Complaint contains sufficient

allegations for both Counts One and Two to state causes of action,

the Court will turn to defendants’ personal jurisdiction

arguments.

A. Personal Jurisdiction Legal Standards

“Personal jurisdiction . . . is ‘an essential element of the

jurisdiction of a district . . . court,’ without which the court

is ‘powerless to proceed to an adjudication.’” Ruhrgas AG v.

Marathon Oil Co., 526 U.S. 574, 584 (1999) (quoting Emp’rs

Reinsurance Corp. v. Bryant, 299 U.S. 374, 382 (1937)); see also

Posner, 178 F.3d at 1214 n.6. The standard to be applied to

determine personal jurisdiction may depend, however, on the

asserted basis for subject matter jurisdiction.

Subject matter jurisdiction in this case is now premised upon

5

both complete diversity of citizenship and federal question

jurisdiction. Because the DTSA does not provide for nationwide

service of process, the court determines personal jurisdiction

5

While the First Amended Complaint does not properly allege

the citizenship of Hoggatt, alleging only residency instead of

domicile, the Notice of Removal properly alleges his citizenship

in Missouri. (Doc. #1, ¶ 14.)

using the state long-arm statute and the Due Process Clause. Snow

v. DirecTV, Inc., 450 F.3d 1314, 1317 (11th Cir. 2006) (citing

Cable/Home Commc’n Corp. v. Network Prods., Inc., 902 F.2d 829,

855 (11th Cir. 1990)). Under such a statute

[a] federal district court in Florida may

exercise personal jurisdiction over a

nonresident defendant to the same extent that

a Florida court may, so long as the exercise

is consistent with federal due process

requirements. If both Florida law and the

United States Constitution permit, the federal

district court may exercise jurisdiction over

the nonresident defendant.

Licciardello v. Lovelady, 544 F.3d 1280, 1283 (11th Cir. 2008)

(citations omitted). The personal jurisdiction standard in such

a federal question case thus becomes the same as that applied in

diversity jurisdiction cases.

“A federal court sitting in diversity

undertakes a two-step inquiry in determining

whether personal jurisdiction exists: the

exercise of jurisdiction must (1) be

appropriate under the state long-arm statute

and (2) not violate the Due Process Clause of

the Fourteenth Amendment to the United States

Constitution.”

Carmouche v. Tamborlee Mgmt., Inc., 789 F.3d 1201, 1203 (11th Cir.

2015) (quoting United Techs. Corp. v. Mazer, 556 F.3d 1260, 1274

(11th Cir. 2009)).

Procedurally, to establish personal jurisdiction over a

nonresident defendant, the plaintiff “bears the initial burden of

alleging in the complaint sufficient facts to make out a prima

facie case of jurisdiction.” Louis Vuitton Malletier, S.A. v.

Mosseri, 736 F.3d 1339, 1350 (11th Cir. 2013) (quotation omitted).

The plaintiff must present “enough evidence to withstand a motion

for directed verdict.” Stubbs v. Wyndham Nassau Resort & Crystal

Palace Casino, 447 F.3d 1357, 1360 (11th Cir. 2006) (citation and

marks omitted). A directed verdict, now referred to as a judgment

as a matter of law, is appropriate where “viewing the evidence in

its entirety and drawing all reasonable inferences in favor of the

nonmoving party, . . . the nonmoving party failed to make a showing

on an essential element of his case with respect to which he had

the burden of proof.” Smith v. United States, 894 F.2d 1549, 1552

(11th Cir. 1990) (citations omitted).

Despite a prima facie showing in a complaint, the defendant

may challenge personal jurisdiction by submitting affidavits,

depositions, or other evidence.

When a defendant challenges personal

jurisdiction “by submitting affidavit

evidence in support of its position, the

burden traditionally shifts back to the

plaintiff to produce evidence supporting

jurisdiction.” Madara v. Hall, 916 F.2d 1510,

1514 (11th Cir. 1990) (internal quotation

marks omitted).

Mosseri, 736 F.3d at 1350. “Where the plaintiff’s complaint and

supporting evidence conflict with the defendant’s affidavits, the

court must construe all reasonable inferences in favor of the

plaintiff.” Meier ex rel. Meier v. Sun Int’l Hotels, Ltd., 288

F.3d 1264, 1269 (11th Cir. 2002). “If such inferences are

sufficient to defeat a motion for judgment as a matter of law, the

court must rule for the plaintiff, finding that jurisdiction

exists.” PVC Windoors, Inc., 598 F.3d at 810.

6

Unlike a Florida state court , a federal district court is

not required to hold an evidentiary hearing even in the face of

conflicting evidence as to the facts supporting or challenging

personal jurisdiction. Mut. Serv. Ins. Co. v. Frit Indus., Inc.,

358 F.3d 1312, 1319 n.6 (11th Cir. 2004). “If, however, the court

holds an evidentiary hearing to adjudicate the issue of whether

the court has jurisdiction over the defendant’s person, the court

determines the credibility of witness testimony, weighs the

evidence, and finds the relevant jurisdictional facts.” PVC

Windoors, Inc., 598 F.3d at 810.

B. Application of Standards

(1) Prima Facie Allegations in First Amended Complaint

Defendants do not appear to assert that plaintiffs have failed

to meet their initial burden of alleging a prima facie case for

personal jurisdiction in the First Amended Complaint. Rather,

defendants argue that the allegations purporting to establish

6

Dickinson Wright, PLLC v. Third Reef Holdings, LLC, 244 So.

3d 303, 306 (Fla. 4th DCA 2018) (“When the affidavits cannot be

harmonized, the trial court must hold a limited evidentiary hearing

to determine jurisdiction.”)

personal jurisdiction are “false.” (Doc. #89, p. 1.) In any

event, the Court is satisfied that the allegations in the First

Amendment Complaint relating to personal jurisdiction present

enough evidence to withstand a motion for judgment as a matter of

law. Therefore, plaintiffs have satisfied their prima facie

burden.

(2) Florida Long-Arm Statute

Defendants assert that plaintiffs have not factually

established personal jurisdiction over either defendant,

submitting affidavits and evidence in support of their position.

The burden therefore shifts back to plaintiffs to factually

establish personal jurisdiction over each defendant.

The First Amended Complaint alleges three bases on which the

Court has personal jurisdiction over defendants: (1) both

defendants “operated, conducted, engaged in and / or carried on a

business or business venture in the State of Florida”; (2) both

defendants “committed tortious acts within Florida, including but

not limited to misappropriation of trade secrets and other

proprietary, confidential information of the Plaintiffs”; and (3)

both defendants “had continuous and systematic contacts with

Florida by engaging in numerous activities that have had an effect

in this State.” (Doc. #88, ¶¶ 6, 7, 12.) Plaintiffs have abandoned

the third ground for personal jurisdiction, which was premised on

section 48.193(2), Florida Statutes, by failing to pursue it in

their response in opposition to the motion to dismiss. (Doc. #90,

pp. 9-16.)

While the First Amended Complaint does not identify the

Florida statutes upon which it relies, plaintiffs are clearly

asserting specific jurisdiction under the first two provisions of

section 48.193(1)(a), Florida Statutes. Under section 48.193(1),

a defendant is subject to jurisdiction in Florida for causes of

action arising from one or more of nine enumerated Florida-

connected acts. The pertinent portions of the statute provide:

(1)(a) A person, whether or not a citizen or resident of

this state, who personally or through an agent does any

of the acts enumerated in this subsection thereby

submits himself or herself . . . to the jurisdiction of

the courts of this state for any cause of action arising

from any of the following acts:

1. Operating, conducting, engaging in, or carrying

on a business or business venture in this state

or having an office or agency in this state.

2. Committing a tortious act within this state.

§ 48.193(1)(a)(1)-(2), Fla. Stat. These provisions

expressly require allegations both: (i) that

the defendant does one of the enumerated acts

within Florida, and (ii) that the plaintiff’s

cause of action “arise from” one of the

enumerated acts occurring in Florida. See §

48.193(1)(a), Fla. Stat. (2015). These dual

requirements—that the defendant’s conduct

occur in Florida and that the plaintiff’s

cause of action arises from such Florida

activity—are known as the statute’s connexity

requirement.

Banco de los Trabajadores v. Cortez Moreno, 237 So. 3d 1127, 1135

(Fla. 3d DCA 2018) (citations omitted.) The Court is required to

apply this statute “as would the Florida Supreme Court,” and to

construe it strictly. Prunty v. Arnold & Itkin LLP, 753 Fed. App’x

731, 734 (11th Cir. 2018) (citations omitted).

(a) Operating a Business

(1) General Principles

Florida asserts personal jurisdiction over a defendant under

this portion of the statute when three elements are satisfied:

(1) there is a cause of action, (2) arising from, (3) “[o]perating,

conducting, engaging in, or carrying on a business or business

venture in [Florida] or having an office or agency in [Florida].”

§ 48.193(1)(a)(1), Fla. Stat.

As the Court has determined, plaintiffs have plausibly

asserted causes of action against both defendants for violation of

the FUTSA and the DTSA. Importantly, those causes of action did

not exist in this case until, at the earliest, September 21, 2016,

when the Asset Purchase Agreement was signed. Until then,

plaintiffs had no interest in the trade secrets created and

possessed by Adknowledge, and therefore no standing to assert

causes of action for misappropriation of such trade secrets.

Spokeo, Inc., 136 S. Ct. at 1547-48.

Plaintiffs must also show that the causes of action “arise

from” the business conducted in Florida. “Although the term

‘arising from’ does not mean proximately caused by, it does require

direct affiliation, nexus, or substantial connection to exist

between the basis for the plaintiffs’ cause of action and the

defendants’ business activity in the state.” Gadea v. Star

Cruises, Ltd., 949 So. 2d 1143, 1149-50 (Fla. 3d DCA 2007)

(citations omitted).

Finally, plaintiffs must show that, as relevant to this case,

the causes of action arose from “[o]perating, conducting, engaging

in, or carrying on a business or business venture in” Florida.

“[T]he activities of the defendant[s] must be considered

collectively and show a general course of business activity in the

state for pecuniary benefit.” Horizon Aggressive Growth, L.P. v.

Rothstein-Kass, P.A., 421 F.3d 1162, 1167 (11th Cir. 2005). That

requirement can be satisfied either by (1) “‘doing a series of

similar acts for the purpose of thereby realizing pecuniary

benefit,’” or (2) “‘doing a single act for such purpose with the

intention of thereby initiating a series of such acts.’” Wm. E.

Strasser Constr. Corp. v. Linn, 97 So. 2d 458, 460 (Fla. 1957)

(quoting Restatement (First) of Judgments § 22 (1942) (emphasis

omitted)). “Factors to consider in making this determination

include: (1) the presence and operation of an office in Florida;

(2) the possession and maintenance of a license to do business in

Florida; (3) the number of Florida clients served; and (4) the

percentage of overall revenue gleaned from Florida clients.”

Stonepeak Partners, LP v. Tall Tower Capital, LLC, 231 So. 3d 548,

555 (Fla. 2d DCA 2017) (marks and citations omitted). “Moreover,

the term ‘business venture’ is generally applied to one subject

matter or undertaking while ‘business’ is broader in scope denoting

a variety of subjects, transactions or undertakings.” Ferguson v.

Estate of Campana, 47 So. 3d 838, 842 (Fla. 3d DCA 2010) (marks

and citations omitted).

Plaintiffs assert that “Defendants conducted business in

Florida by targeting business opportunities in this state and

deploying desktop extensions to Florida consumers, all of which

generate revenue for Defendants.” (Doc. #90, p. 11.) Plaintiffs

further assert that because Hoggatt testified in deposition that

he “had to do years of competitive research” in desktop extensions

or apps in order to form Mediavo, and because he formed Mediavo

“almost immediately” upon leaving Adknowledge, “his ‘market

research’ by definition had to have taken place while at

Adknowledge.” (Id. citing Doc. #90-14, p. 172.) Plaintiffs

continue:

The evidence shows that to that end, and in

preparation for him absconding with the trade

secrets from Adknowledge and of the formation

of Mediavo, Hoggatt attended executive and

client meetings in Florida, viewed

confidential documents containing Plaintiffs’

trade secrets in Florida, and stole these

trade secrets to form a direct competitor of

Plaintiffs. Mediavo then registered to conduct

business in Florida under the name

HyperConnect Media. Through its d/b/a, Mediavo

targeted Florida consumers and deployed

extensions created using Plaintiffs’ trade

secrets.

(Id. at 11-12.)

(2) Application of Principles

First, the Court briefly discusses the facts and factual

disputes which are not relevant to the personal jurisdiction issue.

Any acquisition of or exposure to trade secrets by Hoggatt prior

to September 21, 2016 cannot be relevant to the § 48.193(1)(a)(1)

inquiry because plaintiffs could not have had a cause of action

before that date. Thus, while the Court accepts plaintiffs’

assertions as to the development and maintenance of the trade

secrets in Florida, Hoggatt’s knowledge of those trade secrets

while employed by Adknowledge, Hoggatt’s travel to and meetings in

Florida while an employee of Adknowledge before September 21, 2016,

Hoggatt’s management of Adknowledge employees in Florida, and the

configuration of the floor plan of the Florida office, these

assertions do not help satisfy plaintiffs’ burden under section

48.193(1)(a)(1), Florida Statutes.

Between September 21, 2016 and October, 2017, Hoggatt

remained an employee of Adknowledge. Even assuming plaintiffs are

correct about Hoggatt’s “research” during this time period, there

are no factual allegations as to Hoggatt’s connection with or

conduct in Florida during this time period.

In October, 2017 Hoggatt left his employment with

Adknowledge, and according to plaintiffs, “absconded” with their

trade secrets. (Doc. #88, p. 14.) Plaintiffs have satisfactorily

shown that thereafter:

•

On October 19, 2017, Hoggatt formed Mediavo, Inc. as a

Delaware corporation. (Doc. #90-10, p. 73.) Hoggatt was

listed as the Chairman of Mediavo and its only officer, with

a Kansas City, Missouri address. (Id. p. 74.)

•

In October, 2017, Hoggatt filed an Application by Foreign

Corporation for Authorization to Transact Business in Florida

and supporting paperwork. (Id. p. 72-74.) Mediavo’s address

was listed as “c/o HyperConnect Media” with a Florida address,

and Hoggatt was identified as the contact person if further

information was needed. (Id. p. 72.) A registered agent was

designated in Florida. (Id. p. 73.)

•

On February 27, 2018, Hoggatt filed an Application for

Delivery of Mail Through Agent with the United States Postal

Service for HyperConnect Media mail to be delivered to a UPS

Store in Florida. (Doc. #90-11, p. 77-78.)

•

Effective April 16, 2018, a Certificate of Authority to do

business in Florida was issued by the Florida Department of

State to Mediavo, Inc. (Doc. #90-10, pp. 69-70.)

•

A confirming letter from the Florida Department of State dated

April 18, 2018 was sent to Hoggatt. (Id. p. 69.)

•

On April 19, 2018, Mediavo registered HyperConnect Media as

a fictitious name with the Florida Department of State (id.

at 68), which conducts business in Florida.

•

Mediavo has done, and continues to do, business in Florida.

Mediavo states that its business is composed of 7% Florida

users, which constitutes 6% of Mediavo’s overall revenue.

(Doc. #89-1, p. 27.)

•

Mediavo has entered into at least one contract in which it

submitted to the jurisdiction of a Florida court. (Doc. #89-

2, p. 34; Doc. #90-12, p. 102.)

•

Mediavo operates the website www.geteasymaps.co, which

directs users to a “Contact Us” section which identifies

HyperConnect Media with a Florida address. (Doc. #90-13, pp.

105-07.)

•

Mediavo is deploying extensions in Florida, although

defendants have apparently refused to identify the names of

the Florida customers. (Doc. #90-14, pp. 147, 149; Doc. #90,

p. 7.)

•

The domain name for HyperConnect Media is owned by a Wyoming

LLC which was set up for Mediavo by its Florida attorney.

(Doc. #90-9, p. 63.)

The Court finds that plaintiffs have sufficiently established

that defendants are pursuing a cause of action which arises from

defendants’ conducting a business in Florida.

(b) Committing Tortious Act

Section 48.193(1)(a)(2), Florida Statutes, provides that a

person “who personally or through an agent” commits a tortious act

within this state “thereby submits himself or herself . . . to the

jurisdiction of the courts of this state for any cause of action

arising from . . . [c]ommitting a tortious act within this state.”

“The statute expressly requires that the tort be committed in

Florida.” Casita, L.P. v. Maplewood Equity Partners L.P., 960 So.

2d 854, 857 (Fla. 3d DCA 2007). “In analyzing whether tortious

conduct has occurred within Florida, courts have looked to whether

the nonresident defendant committed a substantial aspect of the

alleged tort in Florida.” NHB Advisors, Inc. v. Czyzyk, 95 So. 3d

444, 448 (Fla. 4th DCA 2012) (marks and citation omitted); see

also Internet Sols. Corp. v. Marshall, 557 F.3d 1293, 1296 (11th

Cir. 2009) (“For the purposes of the [long-arm] statute, the

defendant does not have to be physically present in Florida for

the tortious act to occur within that state.”); 3Lions Publ’g,

Inc. v. Interactive Media Corp., 389 F. Supp. 3d 1031, 1037 (M.D.

Fla. 2019) (“Under the long-arm statute, a nonresident defendant

need not have a physical presence in Florida for the Court to

assert personal jurisdiction. Instead, such a nonresident

defendant need only commit a tortious act that causes injury within

Florida.” (citations omitted)).

The First Amended Complaint alleges defendants

misappropriated plaintiffs’ trade secrets under the FUTSA and the

DTSA, which constitutes a “tortious act” under the long-arm

statute. See Bovie Med. Corp. v. Livneh, 2010 WL 5297172, *6 (M.D.

Fla. Dec. 20, 2010) (“Misappropriation of trade secrets is an

intentional tort in the state of Florida.”). Additionally,

defendants concede that they have solicited business in Florida,

and plaintiffs assert this was through the extensions and

strategies that plaintiffs contend constitute trade secrets.

The Court finds that plaintiffs have sufficiently established

that defendants are pursuing a cause of action which arises from

defendants’ committing a tortious act in Florida.

(3) Due Process Clause

Having determined Florida’s long-arm statute is satisfied,

the Court must determine whether the exercise of personal

jurisdiction comports with due process. The touchstone of this

analysis is whether the defendant has “certain minimum contacts

with [the state] such that the maintenance of the suit does not

offend ‘traditional notions of fair play and substantial

justice.’” Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)

(citation omitted). The minimum contacts inquiry focuses on “the

relationship among the defendant, the forum, and the litigation.”

Walden v. Fiore, 571 U.S. 277, 284 (2014) (marks and citation

omitted).

“To determine whether the exercise of specific jurisdiction

affords due process, we apply a three-part test.” Waite v. All

Acquisition Corp., 901 F.3d 1307, 1313 (11th Cir. 2018).

First, we consider whether the plaintiffs have

established that their claims “arise out of or

relate to” at least one of the defendant’s

contacts with the forum. Second, we ask

whether the plaintiffs have demonstrated that

the defendant “purposefully availed” itself of

the privilege of conducting activities within

the forum state. If the plaintiffs carry their

burden of establishing the first two prongs,

we next consider whether the defendant has

“ma[de] a compelling case that the exercise of

jurisdiction would violate traditional

notions of fair play and substantial justice.”

Id. (citations omitted).

The Court finds that plaintiffs causes of action against

defendants in Florida satisfy due process. As discussed earlier,

plaintiffs have established that their claims “arise out of or

relate to” at least one of defendants’ contacts with the forum.

Both the causes of action arise out of defendants’ conducting

business in Florida and/or committing a tortious act in Florida.

Additionally, it is clear that plaintiffs have demonstrated that

defendants “purposefully availed” themselves of the privilege of

conducting activities within Florida. Indeed, they utilized

Florida administrative processes to obtain authority for Mediavo

to do so. Finally, defendants have not “ma[de] a compelling case

that the exercise of jurisdiction would violate traditional

notions of fair play and substantial justice.” Defendants both

have far more than “slight contact” with Florida, and the conduct

in Florida, if true, is the but-for cause of the alleged

misappropriation. Hoggatt and Mediavo are alleged to now be using

the trade secrets to directly compete with plaintiffs, including

Spigot, in Florida. See Licciardello, 544 F.3d at 1288 (“The

Constitution is not offended by the exercise of Florida’s long-

arm statute to effect personal jurisdiction over Lovelady because

his intentional conduct in his state of residence was calculated

to cause injury to Carman in Florida. Lovelady cannot now claim

surprise at being haled into court here.” (citations omitted)).

Having reviewed the allegations in the First Amended

Complaint as well as the evidence provided by the parties, the

Court finds defendants’ alleged conducting business in Florida and

alleged misappropriation of trade secrets and utilization of them

in Florida are sufficient to meet the Constitutional requirements

for minimum contacts in this case. The Court will now turn to

defendants’ fairness argument.

“Once it has been decided that a defendant purposefully

established minimum contacts within the forum State, these

contacts may be considered in light of other factors to determine

whether the assertion of personal jurisdiction would comport with

‘fair play and substantial justice.’” Burger King Corp v.

Rudzewicz, 471 U.S. 462, 476 (1985) (quoting Int’l Shoe, 326 U.S.

at 320). Such factors include (1) ”the burden on the defendant,”

(2) “the forum State’s interest in adjudicating the dispute,” (3)

“the plaintiff’s interest in obtaining convenient and effective

relief,” (4) “the interstate judicial system’s interest in

obtaining the most efficient resolution of controversies,” and (5)

“the shared interest of the several States in furthering

fundamental substantive social policies.” Id. at 477 (quoting

World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 292 (1980)).

However, it is a rare situation in which sufficient minimum

contacts exist but where the exercise of jurisdiction would be

unreasonable. Elecs. For Imaging, Inc. v. Coyle, 340 F.3d 1344,

1352 (11th Cir. 2003).

Defendants argue that fairness dictates dismissal of the case

so it may be heard in Missouri, asserting the following:

There is nothing in these fairness factors that warrants

an assertion of jurisdiction in Florida. In fact, the

factors prove how unreasonable it is to assert

jurisdiction over Defendants. It is burdensome to make

Defendants travel to Florida to litigate this case—

especially given that the balance of witnesses,

evidence, and documents related to the claims and

possible defenses are located in Missouri and/or the

Cayman Islands. Florida has no interest in providing a

forum to this dispute—especially when only one Plaintiff

(Spigot) is located here and the Subject Information is

situated in the Cayman Islands. As to the third factor,

while it may be burdensome to make Spigot leave the state

to litigate its claims, no other party—including the

other Plaintiffs—seems to have any interest in hearing

this case in Florida. And the last two factors—

interstate efficiency and the shared interests of the

state—certainly support dismissing this case—still in

the pleading stage—so that the dispute can be heard in

Missouri (where jurisdiction is proper).

(Doc. #89, p. 16.) Having considered defendants’ arguments, the

Court is unconvinced.

Defendants have not offered evidence of financial limitations

to show a burden of litigating in Florida, the state of Florida

has an interest in adjudicating a dispute that allegedly causes

injury here in violation of its laws, plaintiffs have chosen

Florida as their preferred forum to obtain relief, and the

judiciary has an interest in resolving a dispute in the forum where

the case has been pending since November 2018. E.g., Mosseri, 736

F.3d at 1358; Island Stone Int’l Ltd. v. Island Stone India Private

Ltd., 2017 WL 1437464, *8 (M.D. Fla. April 4, 2017); Am. Airlines,

Inc. v. Despegar.com USA, Inc., 2014 WL 11880999, *8 (S.D. Fla.

May 14, 2014).

In conclusion, plaintiffs have demonstrated that the Court

has specific jurisdiction over defendants pursuant to the Florida

long-arm statute and that exercising that jurisdiction comports

with due process. Accordingly, the Court denies defendants’

request to dismiss the case pursuant to Federal Rule of Civil

Procedure 12(b)(2).

IV.

Defendants also assert that proper venue is not in Florida,

but in Missouri. Venue is defined by federal statute as “the

geographic specification of the proper court or courts for the

litigation of a civil action that is within the subject-matter

jurisdiction of the district courts in general . . . .” 28 U.S.C.

§ 1390(a). Pursuant to Rule 12(b)(3) of the Federal Rules of Civil

Procedure, a defendant may move to dismiss a claim for improper

venue, and the plaintiff bears the burden of demonstrating the

venue selected is proper. Watson v. Cmty. Educ. Ctrs., Inc., 2011

WL 3516150, *2 (M.D. Fla. Aug. 11, 2011) (citing Delong Equip. Co.

v. Wash. Mills Abrasive Co., 840 F.2d 843, 845 (11th Cir. 1988)).

The Court must accept all allegations of the complaint

as true, unless contradicted by the defendants’

affidavits. When an allegation of the complaint is

challenged, the court may examine facts outside of the

complaint to determine whether venue is proper. In

examining the record, the court must draw all reasonable

inferences and resolve all factual conflicts in favor of

the plaintiff.

Id. (marks and citations omitted).

A. Venue Legal Standards

In the absence of a specialized venue statute, venue in a

federal civil action is governed by 28 U.S.C. § 1391. Under this

statute, a civil action may be brought in

(1) a judicial district in which any defendant resides,

if all defendants are residents of the State in which

the district is located;

(2) a judicial district in which a substantial part of

the events or omissions giving rise to the claim

occurred, or a substantial part of property that is the

subject of the action is situated; or

(3) if there is no district in which an action may

otherwise be brought as provided in this section, any

judicial district in which any defendant is subject to

the court’s personal jurisdiction with respect to such

action.

28 U.S.C. § 1391(b). “When venue is challenged, the court must

determine whether the case falls within one of the three categories

set out in § 1391(b). If it does, venue is proper; if it does

not, venue is improper, and the case must be dismissed or

transferred under § 1406(a).” Atl. Marine Const. Co., Inc. v.

U.S. Dist. Court for W. Dist. of Tex., 571 U.S. 49, 56 (2013).

B. Analysis

The First Amended Complaint asserts venue is proper “because

Hoggatt and Mediavo are nonresidents and they can be sued in any

county in this state.” (Doc. #88, ¶ 8.) Defendants accurately

point out that this is not the correct standard in federal court.

(Doc. #89, p. 17.) Additionally, it is clear that § 1391(b)(1)

does not apply since all defendants do not reside in the same

state. Hoggatt resides in Missouri, 28 U.S.C. § 1391(c)(1), and

Mediavo is deemed to reside in Florida, 28 U.S.C. § 1391(c)(2).

Plaintiffs assert that venue is proper in the Middle District

of Florida because a substantial part of the events giving rise to

the claims occurred in that district, as required by § 1391(b)(2).

The Court agrees with plaintiffs.

Plaintiffs have alleged Hoggatt obtained the trade secrets

and he and Mediavo are now using them to directly compete with

plaintiffs in Florida. The use of the trade secrets, including

use in Florida, is the basis for both misappropriation claims and,

therefore, a substantial part of the underlying events.

Defendants suggest that even if Hoggatt obtained the trade

secrets in Florida, “there is no question that a substantial part

of the alleged misappropriation, including the development,

production and distribution of competing extensions took place

outside of Florida.” (Doc. #89, p. 18.) However, the question is

not whether more events occurred outside of Florida, but simply

whether a substantial part occurred here. See BW Orchards, LLC v.

Spiech Farms Ga., LLC, 2019 WL 2635541, *3 (S.D. Ga. June 26, 2019)

(“It is important to note that Plaintiffs are not required to show

that a majority of the events occurred in the Southern District of

Georgia; rather, they only need to show that a substantial part of

the events occurred here.”).

Drawing all reasonable inferences and resolving the factual

conflicts in plaintiffs’ favor, the Court finds the alleged use of

the trade secrets in Florida to directly compete with plaintiffs

in Florida form a substantial part of the events giving rise to

the misappropriation claims. As such, venue is proper in this

District.

Accordingly, it is now

ORDERED:

Defendants’ Motion to Dismiss For Lack of Personal

Jurisdiction, For Improper Venue and, Alternatively, for Failure

to State a Claim Upon Which Relief Can Be Granted (Doc. #89) is

GRANTED to the extent the First Amended Complaint alleges causes

of action based on conduct occurring prior to September 21, 2016,

and such portions of the claims are dismissed without prejudice.

The motion is otherwise DENIED.

DONE AND ORDERED at Fort Myers, Florida, this 23rd day of

April, 2020.

\_f — Ap f

vA = Pe

E. STEELE

Sq IGOR UNITED STATES DISTRICT JUDGE

Copies:

Parties of record